Exhibit
|
Description
|
NEOGAMES S.A.
|
|||
By:
|
/s/ Moti Malul
|
||
Name: Moti Malul
|
|||
Title: Chief Executive Officer
|
|||
• |
Our iLottery business continues to show strong growth, increasing 11.1% during the quarter and 22.4% for the full year 2023, with further room to run.
|
• |
We just launched our market leading eInstants with the North Carolina Education Lottery, where the launch has demonstrated significant early success, mirroring trends
we saw when we first launched our eInstants product in Virginia. We also signed a two-year extension with the North Carolina Education Lottery, further cementing this valuable partnership. In another exciting development, NeoPollard
Interactive was awarded a new ten-year contract to provide our turn-key iLottery solutions to the West Virginia Lottery, which is expected to launch during the fourth quarter of 2024.
|
• |
Our Pariplay business also saw excellent growth, signing several major new operators during the quarter including Hard Rock Digital, DraftKings and bet365.
|
• |
Subsequent to quarter-end, we are also excited with our planned launch in Tennessee in the coming weeks with Action 24/7, Aspire’s first U.S. customer to go live with
online sports betting.
|
• |
The total of Revenues and the Company’s share of NPI revenues was $64.9 million during the fourth quarter of 2023, compared to $83.2 million during the fourth quarter
of 2022. These figures reflect accounting for the majority of Aspire Core revenues on a net basis in the fourth quarter of 2023 compared to historical figures in the fourth quarter of 2022, 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, the total of Revenue and the Company’s share in NPI revenues
would have been $95.2 million, which would have reflected 14.5% year-over-year growth when measured in reporting currency. In addition to accounting for the new commercial terms, current year results reflect continued growth in the
Company’s iLottery, Games and Sports business lines, partially offset by a slowdown in Aspire Core revenues due to regulatory changes in the United Kingdom and a temporary pause in operations in Germany prior and due to the Company
obtaining its local license to operate.
|
• |
iLottery revenues were $14.4 million during the fourth quarter of 2023, compared to $14.5 million during the fourth quarter of 2022, representing a decrease of (0.4)%
year-over-year. In addition, the Company’s share in NPI revenues was $17.2 million during the fourth quarter of 2023, compared to $14.0 million during the fourth quarter of 2022, representing an increase of 22.9% year-over-year. The total
of NeoGames’ iLottery revenue plus the Company’s share of NPI revenues during the fourth quarter of 2023 was $31.6 million, up 11.1% year-over-year, primarily driven by continued positive growth trend across most major accounts as well as
by very strong performance of new game launches by NeoGames Studio.
|
• |
iGaming revenues were $33.4 million for the fourth quarter of 2023. These figures 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 $63.7 million for iGaming primarily driven by continued growth in Games and Sports business lines, partially offset by a slowdown in Aspire Core revenues due to regulatory changes in the United
Kingdom and a temporary pause in operations in Germany prior to the Company recently securing its local license to operate, which would have reflected 16.2% year-over-year growth when measured in reporting currency.
|
• |
Net loss was $(6.1) million, or $(0.18) per share, during the fourth quarter of 2023, compared to a net loss of $(0.8) million, or $(0.02) per share, during the
fourth quarter of 2022. Net loss during the fourth quarter of 2023 was mainly due to costs attributed to the Aristocrat transaction and the amortization attributable to the Aspire business combination, income tax expenses and interest and
finance related expenses.
|
• |
Adjusted net income1 was $1.7 million, or $0.05 per share, during the fourth quarter of 2023, compared to $7.3 million, or $0.22 per share, during the
fourth quarter of 2022.
|
• |
Adjusted EBITDA1 was $18.2 million during the fourth quarter of 2023, compared to $18.1 million during the fourth quarter of 2022, representing an increase
of 0.4% year-over-year. Adjusted EBITDA results slightly increased during the quarter compared to the prior year, mainly due to good performance of the iLottery and the sports business lines, offset primarily by the Aspire Core business due
to several factors related to the adaptation of regulatory changes as well as changes in partner mix.
|
• |
The total of Revenues and the Company’s share of NPI revenues was $254.6 million for the year ended December 31, 2023, compared to $210.2 million for the year ended
December 31, 2022. These figures reflect accounting for the majority of Aspire Core revenues on a net basis for the year ended December 31, 2023, compared to historical figures during the year ended December 31, 2022, 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, the total of Revenue and the
Company’s share in NPI revenues would have been $351.3 million, which would have reflected 15.2% year-over-year growth when measured in reporting currency. In addition to accounting for the new commercial terms, current year results
reflect continued growth in the Company’s iLottery, Games and Sports business lines, partially offset by a slowdown in Aspire Core revenues due to regulatory changes in the United Kingdom and a temporary pause in operations in Germany prior
to the Company recently securing its local license to operate. In addition to growth in our business lines, the strong comparison to the prior year is also due to partial year results from the Aspire business, as our acquisition completed
on June 16, 2022.
|
• |
iLottery revenues were $57.0 million for the year ended December 31, 2023, compared to $53.6 million for the year ended December 31, 2022, representing an increase of
6.3% year-over-year. In addition, the Company’s share in NPI revenues was $63.0 million for the year ended December 31, 2023, compared to $44.5 million for the year ended December 31, 2022, representing an increase of 41.8% year-over-year.
The total of NeoGames’ iLottery revenue plus the Company’s share of NPI revenues for the year ended December 31, 2023 was $120.0 million, up 22.4% year-over-year, primarily driven by continued positive growth trend across most major
accounts, as well as a jackpot run during the third quarter of 2023.
|
• |
iGaming revenues were $134.6 million for the year ended December 31, 2023. These figures 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 $231.3 million for iGaming primarily driven by continued growth in Games and Sports business lines, partially offset by a slowdown in Aspire Core revenues due to regulatory changes in the
United Kingdom and a temporary pause in operations in Germany prior to the Company recently securing its local license to operate, which would have reflected 11.8% year-over-year growth when measured in reporting currency.
|
• |
Net loss was $(18.3) million, or $(0.54) per share, for the year ended December 31, 2023, compared to a net loss of $(19.0) million, or $(0.64) per share, for the
year ended December 31, 2022. Net loss during the year ended December 31, 2023 was mainly due to income tax expenses, interest and other finance related expenses and the amortization attributable to the Aspire business combination, offset
by a reduction in business combination related expenses.
|
• |
Adjusted net income1 was $12.8 million, or $0.38 per share, for the year ended December 31, 2023, compared to Adjusted net loss1 of $(3.1)
million, or $(0.11) per share, for the year ended December 31, 2022.
|
• |
Adjusted EBITDA1 was $76.2 million for the year ended December 31, 2023, compared to $54.5 million for the year ended December 31, 2022, representing an
increase of 39.8% year-over-year.
|
• |
Cash and cash equivalents balance as of the year ended December 31, 2023 was $29.0 million, compared to $41.2 million at the end of 2022, resulting in net negative
cash of $12.2 million for the twelve months of 2023. The difference in cash flows is primarily attributable to a number of key factors including advisor payments related to the Aristocrat transaction, slowness in Aspire Core operations, 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.
|
• |
North Carolina Education Lottery went live with NeoGames Studio eInstants during the fourth quarter, and NeoPollard also recently signed a two-year extension with the
North Carolina Education Lottery, further cementing our strong presence in North Carolina.
|
• |
NeoPollard Interactive awarded new contract for West Viginia Lottery to provide the state with a turn-key iLottery system, including a fully integrated omnichannel
Player Loyalty Program and full-featured mobile application. The initial contract period is ten years, with an optional one-year renewal and is expected to launch in the fourth quarter of 2024.
|
• |
Subsequent to quarter end, NeoGames Studio content went line with the Georgia Lottery, one of the largest lotteries in the United States.
|
• |
Pariplay entered Pennsylvania with Rush Street Interactive (NYSE: RSI), and New Jersey with Hard Rock Digital and Tipico.
|
• |
Pariplay is showing strong revenue growth, with room for more, signing 8 new operators during the quarter, including DraftKings and bet365.
|
• |
Expected launch with Action 24/7 in Tennessee over the coming weeks, Aspire’s first U.S. customer to go live with OSB, including our suite of turn-key solutions.
|
• |
Won the public tender in Hungary to provide eInstant games to the Hungarian lottery.
|
December 31, 2023
|
December 31, 2022
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
29,019
|
$
|
41,179
|
||||
Restricted deposits
|
476
|
489
|
||||||
Prepaid expenses and other receivables
|
6,813
|
5,789
|
||||||
Due from the Michigan Joint Operation and NPI
|
5,894
|
3,768
|
||||||
Trade receivables
|
43,414
|
38,537
|
||||||
Income tax receivables
|
283
|
536
|
||||||
Total current assets
|
$
|
85,899
|
$
|
90,298
|
||||
NON-CURRENT ASSETS
|
||||||||
Restricted deposits - Joint Venture and other
|
9,954
|
4,247
|
||||||
Property and equipment
|
3,443
|
3,992
|
||||||
Intangible assets
|
344,338
|
347,213
|
||||||
Right-of-use assets
|
8,742
|
7,973
|
||||||
Investment in Associates
|
5,965
|
4,770
|
||||||
Deferred taxes
|
1,039
|
2,451
|
||||||
Total non-current assets
|
373,481
|
370,646
|
||||||
Total assets
|
$
|
459,380
|
$
|
460,944
|
||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Trade and other payables
|
$
|
20,443
|
$
|
16,042
|
||||
Royalty payables
|
13,328
|
10,838
|
||||||
Client liabilities
|
5,783
|
6,927
|
||||||
Income tax payables
|
6,701
|
7,396
|
||||||
Gaming tax payables
|
7,520
|
10,133
|
||||||
Lease liabilities
|
1,864
|
1,150
|
||||||
Contingent consideration on business combination and other
|
10,729
|
17,256
|
||||||
Employees' related payables and accruals
|
9,866
|
7,262
|
||||||
Total current liabilities
|
$
|
76,234
|
$
|
77,004
|
||||
NON-CURRENT LIABILITIES
|
||||||||
Liability with respect to Caesars' IP option
|
3,450
|
3,450
|
||||||
Loans from financial institution, net
|
217,969
|
209,287
|
||||||
Company share of Joint Venture liabilities, net
|
416
|
539
|
||||||
Lease liabilities
|
6,970
|
6,823
|
||||||
Accrued severance pay, net
|
1,002
|
1,033
|
||||||
Deferred taxes
|
17,867
|
17,469
|
||||||
Total non-current liabilities
|
$
|
247,674
|
$
|
238,601
|
||||
EQUITY
|
||||||||
Share capital
|
60
|
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
|
5,769
|
482
|
||||||
Share premium
|
179,731
|
173,908
|
||||||
Share based payments reserve
|
4,240
|
6,941
|
||||||
Accumulated losses
|
(65,933
|
)
|
(47,656
|
)
|
||||
Total equity
|
135,472
|
145,339
|
||||||
Total liabilities and equity
|
$
|
459,380
|
$
|
460,944
|
Quarter ended December 31,
|
Year to date December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenues
|
$
|
47,761
|
$
|
69,222
|
$
|
191,538
|
$
|
165,698
|
||||||||
Distribution expenses
|
25,425
|
45,419
|
96,497
|
97,579
|
||||||||||||
Development expenses
|
2,313
|
2,622
|
14,896
|
10,278
|
||||||||||||
Selling and marketing expenses
|
3,530
|
2,817
|
10,859
|
5,364
|
||||||||||||
General and administrative expenses
|
9,384
|
8,977
|
33,544
|
23,306
|
||||||||||||
Business combinations related expenses
|
598
|
767
|
6,477
|
17,984
|
||||||||||||
Depreciation and amortization
|
14,246
|
12,258
|
55,940
|
35,611
|
||||||||||||
55,496
|
72,860
|
218,213
|
190,122
|
|||||||||||||
Loss from operations
|
(7,735
|
)
|
(3,638
|
)
|
(26,675
|
)
|
(24,424
|
)
|
||||||||
Interest expenses with respect to funding from related parties
|
-
|
-
|
-
|
2,867
|
||||||||||||
Finance expenses
|
7,432
|
5,882
|
24,778
|
12,238
|
||||||||||||
The Company's share in profits of Joint Venture and associated companies
|
10,626
|
8,132
|
37,334
|
22,110
|
||||||||||||
Loss before income tax expense
|
(4,541
|
)
|
(1,388
|
)
|
(14,119
|
)
|
(17,419
|
)
|
||||||||
Income tax (expenses) benefit
|
(1,534
|
)
|
595
|
(4,158
|
)
|
(1,546
|
)
|
|||||||||
Net loss
|
$
|
(6,075
|
)
|
$
|
(793
|
)
|
$
|
(18,277
|
)
|
$
|
(18,965
|
)
|
||||
Net loss per common share outstanding, basic
|
$
|
(0.18
|
)
|
$
|
(0.02
|
)
|
$
|
(0.54
|
)
|
$
|
(0.64
|
)
|
||||
Net loss per common share outstanding, diluted
|
$
|
(0.18
|
)
|
$
|
(0.02
|
)
|
$
|
(0.54
|
)
|
$
|
(0.64
|
)
|
||||
Weighted average number of ordinary shares outstanding:
|
||||||||||||||||
Basic
|
33,738,570
|
33,482,197
|
33,633,838
|
29,716,281
|
||||||||||||
Diluted
|
33,738,570
|
33,482,197
|
33,633,838
|
29,716,281
|
||||||||||||
Adjusted EPS2
|
$
|
0.05
|
$
|
0.22
|
$
|
0.38
|
$
|
(0.11
|
)
|
YTD
December 31, 2023
|
||||
Cash flows from operating activities:
|
||||
Net loss
|
$
|
(18,277
|
)
|
|
Changes in other financial assets and liabilities
|
(6,840
|
)
|
||
Amortization and depreciation
|
55,940
|
|||
Finance expenses
|
24,778
|
|||
Share based compensation
|
2,910
|
|||
Other
|
(423
|
)
|
||
Net cash generated from operating activities
|
$
|
58,088
|
||
Net cash used in investing activities
|
$
|
(44,002
|
)
|
|
Net cash used in financing activities
|
$
|
(28,075
|
)
|
|
Net decrease in cash and cash equivalents
|
(13,989
|
)
|
||
Cash and cash equivalents – beginning of period
|
41,179
|
|||
Currency exchange differences on cash and cash equivalents
|
1,829
|
|||
Cash and cash equivalents – end of period
|
$
|
29,019
|
Quarter ended December 31,
|
Year to date December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Net loss
|
$
|
(6,075
|
)
|
$
|
(793
|
)
|
$
|
(18,277
|
)
|
$
|
(18,965
|
)
|
||||
Income tax expenses (benefit)
|
1,534
|
(595
|
)
|
4,158
|
1,546
|
|||||||||||
Finance expenses
|
7,432
|
5,882
|
24,778
|
15,105
|
||||||||||||
E(L)BIT
|
2,891
|
4,494
|
10,659
|
(2,314
|
)
|
|||||||||||
Depreciation and amortization
|
14,246
|
12,258
|
55,940
|
35,611
|
||||||||||||
EBITDA
|
17,137
|
16,752
|
66,599
|
33,297
|
||||||||||||
Business combination related expenses
|
598
|
767
|
6,477
|
17,984
|
||||||||||||
Share-based compensation
|
367
|
518
|
2,910
|
2,994
|
||||||||||||
Company share of NPI depreciation and amortization
|
54
|
52
|
212
|
222
|
||||||||||||
Adjusted EBITDA
|
$
|
18,156
|
$
|
18,089
|
$
|
76,198
|
$
|
54,497
|
Quarter ended December 31,
|
Year to date December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Royalties from turnkey contracts
|
$
|
7,849
|
$
|
8,348
|
$
|
31,001
|
$
|
29,729
|
||||||||
Royalties from games contracts
|
573
|
426
|
1,977
|
1,709
|
||||||||||||
Use of IP rights
|
4,441
|
4,154
|
18,155
|
14,293
|
||||||||||||
Development and other services - Aspire
|
-
|
-
|
-
|
767
|
||||||||||||
Development and other services - NPI
|
1,042
|
1,242
|
4,349
|
5,651
|
||||||||||||
Development and other services - Michigan Joint Operation
|
492
|
284
|
1,498
|
1,449
|
||||||||||||
Revenues
|
$
|
14,397
|
$
|
14,454
|
$
|
56,980
|
$
|
53,598
|
||||||||
NeoGames' NPI revenues interest
|
$
|
17,162
|
$
|
13,961
|
$
|
63,045
|
$
|
44,473
|
||||||||
NeoGames revenues plus NPI revenues interest
|
$
|
31,559
|
$
|
28,415
|
$
|
120,025
|
$
|
98,071
|
||||||||
iGaming revenues
|
$
|
33,364
|
$
|
54,768
|
$
|
134,558
|
$
|
112,100
|
||||||||
Revenues plus NeoGames NPI revenues interest
|
$
|
64,923
|
$
|
83,183
|
$
|
254,583
|
$
|
210,171
|
Quarter ended December 31,
|
Year to date December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Net loss
|
$
|
(6,075
|
)
|
$
|
(793
|
)
|
$
|
(18,277
|
)
|
$
|
(18,965
|
)
|
||||
Amortization attributable to business combination, net of tax
|
7,724
|
8,068
|
31,103
|
15,840
|
||||||||||||
Adjusted net income (loss)
|
$
|
1,649
|
$
|
7,275
|
$
|
12,826
|
$
|
(3,125
|
)
|
|||||||
Adjusted net income (loss) per common share outstanding
|
$
|
0.05
|
$
|
0.22
|
$
|
0.38
|
$
|
(0.11
|
)
|
Quarter ended December 31,
|
% Change
|
% Change
|
||||||||||||||||||||||||||||
2023
|
2022 |
As
reported
|
Foreign
exchange
impact |
In
constant
currency
|
As
reported
|
In
constant
currency
|
||||||||||||||||||||||||
Aspire Core3
|
$
|
11,761
|
$
|
40,979
|
$
|
11,761
|
$
|
(668
|
)
|
$
|
11,093
|
(71.3
|
)%
|
(72.9
|
)%
|
|||||||||||||||
Games
|
12,369
|
7,996
|
12,369
|
(687
|
)
|
11,682
|
54.7
|
%
|
46.1
|
%
|
||||||||||||||||||||
Sports
|
9,234
|
5,793
|
9,234
|
(510
|
)
|
8,724
|
59.4
|
%
|
50.6
|
%
|
||||||||||||||||||||
Net Revenues, as reported
|
$
|
33,364
|
$
|
54,768
|
$
|
33,364
|
$
|
(1,865
|
)
|
$
|
31,499
|
Year to date December 31,
|
$ Change
|
% Change
|
||||||||||||||||||||||||||
2023
|
2022
|
As
reported
|
Foreign
exchange
impact
|
In
constant
currency
|
As
reported
|
In
constant
currency
|
||||||||||||||||||||||
Aspire Core4
|
$
|
56,726
|
$
|
149,743
|
$
|
56,726
|
$
|
(1,693
|
)
|
$
|
55,033
|
(62.1
|
)%
|
(63.2
|
)%
|
|||||||||||||
Games
|
43,879
|
34,535
|
43,879
|
(1,230
|
)
|
42,649
|
27.1
|
%
|
23.5
|
%
|
||||||||||||||||||
Sports
|
33,953
|
22,686
|
33,953
|
(1,124
|
)
|
32,829
|
49.7
|
%
|
44.7
|
%
|
||||||||||||||||||
Net Revenues, as reported
|
$
|
134,558
|
$
|
206,964
|
$
|
134,558
|
$
|
(4,047
|
)
|
$
|
130,511
|