NetEnt’s revenue outlook for the year’s final quarter remains positive as the firm acknowledges a best ever quarter from Red Tiger and continued progress in the US as key Q3 performance drivers.
The firm also says that the return of sports betting and the general easing of lockdowns in key markets resulted in a normalisation of revenue growth to pre COVID-19 levels.
As Gonzo’s Quest Megaways became the best performing new game ever launched for the NetEnt Group in terms of gross gaming revenues, US GGR increased 313 per cent to account for more than 10 per cent of total group GGR and continued improvements in live casino saw its figures rise 109 per cent year-on-year.
“During the quarter we continued to invest in our strategic growth areas USA, Red Tiger and live casino, while driving cost and revenue synergies from the ongoing integration between NetEnt and Red Tiger,” noted Therese Hillman, group CEO of NetEnt.
Revenue for the quarter increased 17.6 per cent from SEK 521m (2019: SEK 443m), as EBITDA grew 58.16 per cent from SEK 196m to SEK 310m, as profit for the period reached SEK 167.1m (2019: SEK 76m).
For the year ending September 30, 2020, revenue came in at 1.61bn, a 25.7 per cent rise from SEK 1.28bn, EBITDA surged 41 per cent from SEK 594m to SEK 838m, and profit for the period finished up at SEK 337.5 from SEK 316.1m a year earlier.
Hillman commented: “On a proforma basis, including Red Tiger fully in the previous year’s figures, the group’s total revenues increased organically by nine per cent Y/Y in euro compared to the same period in 2019. The return of sports betting and the general easing of lockdowns in key markets resulted in a normalisation of revenue growth to pre COVID-19 levels.
“Our continued focus on costs started to have a notably positive effect on profitability in the quarter. Underlying earnings before interest, tax, depreciation and amortization (EBITDA) amounted to SEK 313m (2019: 221m), corresponding to a record margin of 60 per cent (50 per cent).”
Looking to the period ahead, NetEnt suggests that a number of actions undertaken will reap rewards during the final quarter, including continued US momentum in West Virginia, Michigan and Pennsylvania, a link-up with Veikkaus and further expansion of the firm’s Malta-based live studio.
Hillman added: “The revenue outlook for Q4 remains positive, supported by the list of actions mentioned above. Further, our product pipeline looks very promising with Megaways versions of such classic titles as Kulta Jaska, Twin Spin and Divine Fortune.
“Given our new lower cost base, the operating leverage of our business and our strong product pipeline, we expect continued strong growth in earnings and cash flow for the rest of the year and beyond.”