NeoGames CEO Moti Malul has spoken of further growth opportunities for the company ahead of its acquisition by Aristocrat Leisure, after the company reported a 98.2% rise in second-quarter revenue to $62.0m (£48.5m). /€56.2 million).

Aristocrat agreed in May to pay $1.20 billion (£921.2 million/€1.07 billion) to acquire all of the provider’s shares. NeoGames’ board unanimously approved the deal, while the provider’s shareholders voted overwhelmingly in favor of the takeover last month.

The transaction remains subject to the satisfaction of certain closing conditions but is expected to close in the first half of fiscal 2024.

Speaking at the release of NeoGames’ Q2 results, CEO Malul said that this completion date was still very likely. He added that the acquisition presents exciting opportunities for NeoGames and the combined company.

“We are very pleased with the successes and partnerships that defined and drove our Q2 results,” said Malul. “Our continued commitment to innovation and excellence has paved the way for expansion into various global markets, with progress in the second quarter of 2023 across all business areas, including BtoBet, Pariplay, Aspire Core as well as NeoPollard Interactive (NPI).

“We are excited about the future and the potential it offers for the continued success of our company. We continue to take steps toward completing our merger with Aristocrat Gaming, which we expect to complete in the first half of fiscal 2024.

“In the meantime, we remain committed to improving the iGaming landscape, seizing opportunities and executing our strategic goals for all stakeholders.”

Sales in the 2nd quarter – with or without NeoPollard Interactive

Total revenue included net gaming revenue plus the provider’s revenue share from the NPI joint venture with Pollard Banknote. Excluding this contribution, sales were 122.8% higher than the previous year at $47.9 million.

Broken down, iGaming revenue was $34.2 million, an increase of 312.1% over the previous year’s total revenue. According to NeoGames, this reflects that the majority of Aspire Core revenue is on a net basis compared to historical figures prepared on a gross basis.

This is due to new terms and conditions in certain Aspire Core contracts that came into effect in January. NeoGames completed its acquisition of Aspire Global in June 2022.

Key developments for the Aspire business included signing the first iGaming deal in the US with PlayLive! Online casino in Pennsylvania. The company also received its official iGaming license for slot machines in Germany.

If iGaming revenues were recorded on a gross basis for Aspire Core, iGaming revenues for iGaming would have been $56.8 million. According to NeoGames, this would have represented a year-on-year growth of 7.5%, measured in reporting currency.

At ilotery, sales rose 7.8% to $13.8 million. Additionally, the separate NPI share was $14.1 million, up 37.9% year-over-year. Combined revenue in this segment was $27.9 million, an increase of 21.2%.

The net loss remains but decreases

In parallel with the increase in sales, operating costs also increased. In the second quarter, expenses were $57.0 million, an increase of 60.1% year-over-year, with the primary expense being selling expenses of $24.1 million.

Financing costs amounted to $5.8 million, while the share of joint venture profits was $8.1 million. This resulted in a pre-tax loss of $6.8 million, an improvement from $12.3 million last year.

NeoGames paid $979,000 in income taxes, leaving a net loss of $7.8 million, less than $12.9 million in 2022. Additionally, adjusted EBITDA increased 74.8% to 18, $0 million.

Sales in the first half of the year increase by 184.0%

The situation also improved in the first half. Revenue was $97.4 million for the six months ended June 30, up 184.0% year over year.

Revenue from iGaming was $69.3 million and Ilotery was $28.2 million, with another $28.9 million coming from the NPI project.

Operating expenses more than doubled from $51.0 million to $109.1 million, but $11.1 million in financing costs were offset by a profit share of $16.5 million by NPI more than offset.

Income tax payments totaled $2.1 million, representing a net loss for the half of $8.6 million, compared to $13.8 million in 2022. Adjusted EBITDA also improved by 103.2% to $38.2 million.