CEO Moti Malul hailed NeoGames’ rapid growth in the US after the operator posted a third-quarter profit increase amid progress on its acquisition by Aristocrat Leisure.
Malul said the online gaming solutions provider is on track to complete the Aristocrat deal next year.
“We continue to make progress toward completing our merger,” Malul said. “This quarter we received additional regulatory approvals necessary for closing. We continue to expect the transaction to close in the first half of fiscal 2024.”
In May, Aristocrat agreed to pay $1.20 billion (£921.2 million/€1.07 billion) to acquire the provider’s shares. Since then, NeoGames’ board of directors and the provider’s shareholders have overwhelmingly voted in favor of the deal.
Increase in results
In NeoGames’ third-quarter financial update, adjusted earnings for the three months totaled $19.9 million – a 13% increase year-over-year.
A change in accounting from gross to net sales for the company’s Aspire Core division resulted in a decline in sales. This change was due to new commercial terms in certain Aspire Core contracts.
However, despite the $10 million year-over-year decline to $63.3 million, NeoGames said its like-for-like numbers reflected an 11.5% increase in revenue.
Accordingly, NeoGames reduced its third-quarter net loss year-over-year from $4.4 million to $3.6 million. In the first three quarters, the net loss fell from $18.2 million to $12.2 million. This helped adjusted earnings rise significantly from $36.4 million to $58.0 million in the first nine months.
“Our lottery business continues to gain market share and grow,” said Malul, who highlighted the U.S. as a key region for expansion.
The company’s joint venture, NeoPollard Interactive (NPI), recently expanded its presence in the US through a deal with the West Virginia Lottery. This will be the fifth state in which NPI will operate a comprehensive lottery program. There was also a deal with the North Carolina Education Lottery.
NeoGames’ ilotery revenue reached $14.4 million in the third quarter – up from $13.7 million last year. The company’s share of NPI revenue also increased 53.3% to $17.0 million from $11.1 million in the quarter.
The company does not believe there will be “a material impact on its ongoing operations in Israel.”