Depreciation and financing costs affected NeoGames’ earnings in the initial three-month period.
Depreciation and financing costs associated with the takeover of Aspire Global by ilottery and igaming solutions provider NeoGames led to the company reporting a net loss for the first quarter.
Home > Finance > Depreciation and financing costs affected NeoGames’ earnings in the initial three-month period
Depreciation and financing costs affected NeoGames’ earnings in the initial three-month period
NeoGames characterized its performance as a continuation of the positive momentum from the end of 2022 into the first quarter of 2023. CEO Moti Malul emphasized some of the company’s accomplishments during the quarter.
“In the ilottery space, our proprietary games from NeoGames Studio continue to perform strongly across all of our key clients and, together with the jackpot wins earlier this quarter, contributed to a strong performance in the US market,” he stated.
“We are also proud to note that our client, the Virginia Lottery, recently became the first US lottery to operate a fully cloud-based ilottery program.”
For NeoGames’ gaming solutions division, Mulul pointed to its BtoBet B2B sports betting subsidiary processing a record 1 billion bets in March. The executive also highlighted the achievements of the company’s igaming content provider business, PariPlay, during the quarter.
Over the three-month period, PariPlay partnered with 12 operators, including DraftKings, and signed 10 additional agreements, including one with Swedish operator Betsson.
NeoGames is delighted with the progress of all its business divisions, which has considerably influenced its financial performance. Income has surged by 187% annually, reaching $64.2 million, compared to $22.4 million in the same period last year. This remarkable growth is primarily attributed to the purchase of Aspire, an online gaming solutions provider, for $423.5 million in June 2022. The online gaming sector generated $35.1 million in revenue during the initial quarter of 2023.
The company’s online lottery sector, unaffected by the acquisition, also witnessed growth, increasing by 8.7% annually, from $13.3 million to $14.4 million.
NeoGames reported an adjusted EBITDA of $20 million, a significant 136.8% increase from $8.5 million in the first quarter of last year before the merger. Despite this robust performance, the company reported a net loss of $0.9 million for the three-month period, unchanged from the same period last year.
NeoGames is hopeful about sustaining this positive momentum throughout the remainder of the year and beyond.
The firm stated that this year’s financial setbacks were primarily attributed to the effect of amortizing intangible assets acquired through the Aspire deal on equity. The enterprise incurred a loss of $13.6 million in the quarter due to depreciation and amortization expenses.
The company also mentioned that interest charges stemming from the merger also negatively impacted NeoGames’ financial performance in 2023. These costs amounted to $5.3 million for the three months concluding on March 31.
Additional expenses also affected the company’s financial standing. NeoGames reported that distribution costs surged nearly 100%, rising from $2.5 million in the initial quarter of 2022 to $23.4 million.
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