NeoGames S.A.

For Q1 2023, NeoGames reported revenues of $49.5 million on the income statement, plus $14.8 million of NPI revenue share, for total revenues plus NPI share of $64.3 million. Adjusted EBITDA was $20.2 million, up from $8.5 million a year ago, with margins exceeding 31%, and adjusted EPS was $0.20 versus negative $0.03 in Q1 2022. iLottery revenue reached $29 million, an all-time high, and iGaming revenue was $35.1 million; management said that if Aspire Core had been accounted for on a gross basis, iGaming revenues would have been $59.9 million, implying 15.3% year-over-year growth on a reporting-currency basis. The company ended the quarter with $44.4 million of cash and cash equivalents, $213.7 million of debt, a weighted average interest rate of 8.35%, and 33.5 million shares outstanding. For 2023, management reaffirmed guidance of $235 million to $255 million for revenues plus share of NPI revenues on a like-for-like basis, which implies 10.4% year-over-year growth at the midpoint versus 2022.

Moti Malul framed the quarter as evidence that NeoGames’ integrated digital gaming platform is gaining traction across iLottery and iGaming. He emphasized the company’s technology and content investments, pointing to the Virginia cloud rollout, the performance of Desert Fantasy, and early but encouraging results in Brazil. His tone was upbeat and confident, especially around cross-selling synergies from the Aspire acquisition and the company’s ability to win new partners and expand existing ones.

Raviv Adler focused on the reported financials and the accounting effects of the Aspire Core transition from gross to net revenue recognition. He said Q1 revenues were $49.5 million, NPI share was $14.8 million, adjusted EBITDA was $20.2 million, and adjusted EPS was $0.20, while cash stood at $44.4 million and debt at $213.7 million with an 8.35% weighted average interest rate. He also noted that strong results put the company in a positive cash flow position, and he pointed out that the Q1 distribution expense and R&D lines were affected by the gross-to-net shift and some one-time employee incentive costs, respectively.

Analysts pressed on whether the strong Q1 start changed the outlook, but management said nothing had surprised them and that Q2 and Q3 are typically weaker seasonal quarters, which were already baked into guidance. Questions on the UK White Paper focused on possible longer-term impacts; management said it expects no 2023 effect and believes the changes should be manageable in the near term, with sustainable growth over time once players and operators adapt. Analysts also asked about jackpot fatigue, cloud-based lottery deployment, and iLottery expansion in states like Massachusetts and Louisiana; management said jackpot timing can cause some fatigue but also drives reactivation, described cloud deployment as a milestone already proven in other markets, and said Massachusetts momentum is growing while retail lottery sales have not been harmed by iLottery launches.