NeoGames’ first set of financial results as a publicly listed business show the lottery solutions provider’s revenue grew 48.8% year-on-year in 2020, aided by significant expansion in North America.
Revenue for the 12 months ended 31 December 2020 came to $49.2m, with this total made up predominantly of turnkey contracts with lottery operators. These contracts accounted for $32.3m of the supplier’s full-year revenue, up 87.1%.
During the year NeoGames, via its NeoPollard Interactive joint venture with Pollard Banknote, powered the launch of the Virginia Lottery’s online offering. This proved to be the most successful roll-out for a US lottery to date, and also saw NeoPollard awarded a five-contract extension.
The year also saw NeoGames and Pollard jointly agree an extension to their Michigan ilottery contract, running until July 2026.
NeoPollard also rolled out the PlayAlberta platform for the Alberta Gaming, Liquor and Cannabis Commission (AGLC), the Canadian province’s first legal online offering.
Outside of North America the supplier also extended its partnership with Czech lottery Sazka, to power its online lottery and gaming offering, until December 2025.
While turnkey contracts comprised the bulk of full-year revenue, NeoGames reported a further $6.7m from the use of intellectual property rights, and $4.4m in fees from development services provided to the NeoPollard JV.
Development and other services provided to Aspire Global, its former parent company, generated a further $2.4m in revenue, and royalties from game contracts brought in an additional $2.0m. The joint operation of Michigan’s ilottery accounted for the final $1.4m of revenue.
Most importantly, however, NeoGames listed on the Nasdaq Global Market in November 2020, raising $81.7m through its initial public offering.
“2020 has definitely been transformational for NeoGames,” chief executive Moti Malul said. “The year also marks positive signs for the growth of ilottery around the world.
“As regulators realise the potential value ilottery can provide to tightening governmental budgets, particularly during the uncertain times brought on by the Covid-19 pandemic, NeoGames continues to represent a trusted provider with superior technology and premium content driving the most profitable ilottery programs.
“In the US iLottery market, according to Eilers & Krejcik Gaming, a leading gaming industry research firm, our NeoPollard JV is the market leader with a 70% market share of iLottery sales during the fourth quarter of 2020,” he added.
Over the year, NeoGames’ operating costs rose 35.4% to $37.6m, leaving an $11.6m profit from operations, up 119.1% year-on-year.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), meanwhile, was up 141.7% to $28.7m. This factored back in costs such as depreciation and amortisation charges of $11.7m, $2.8m in expenses related to its initial public offering.
After financial items, including $4.3m in interest expenses, its pre-tax profit jumped from $1.2m in 2019 to $6.6m. Net profit, once $1.4m in income taxes were paid and a $1.4m share of profits from the NeoPollard JV factored in, came to $6.5m, compared to a $4.0m loss in the prior year.
This followed a fourth quarter in which revenue climbed 56.4% to $14.0m. Over the three months to 31 December, 2020, revenue from turnkey contracts almost doubled to $8.8m, while IP rights fees grew to $2.0m.
NeoGames received an additional $1.5m for development services provided to NeoPollard, $566,000 from those provided to Aspire and $342,000 related to the Michigan ilottery launch. It also received $783,000 in royalties from games contracts.
After operating expenses of $11.2m, operating profit came to $2.9m, up 94.4%. Adjusted EBITDA, with depreciation and amortisation charges of $1.1m and $1.2m of IPO-related costs included, came to $9.0m, up 160.6%.
After financial items, this left a $1.7m pre-tax profit, which after income taxes and a $1.5m contribution from NeoPollard, left a net profit of $2.5m, up from a $648,000 net loss in 2019.
Turning to the current year, NeoGames rolled out online instant win games for Austrian Lotteries in February, its first titles to go live on the Sazka Group-owned Win2Day igaming portal.
NeoGames will roll out its full suite of instant win content, which it said would provide the lottery’s customers with “a steady, ongoing stream of new, unique, and exciting games, enhancing the overall gaming experience offered by the lottery.”
“Entering 2021, on the back of our successful IPO, we believe NeoGames remains well-positioned to continue to capitalize on the current landscape as a leader in the rapidly expanding global ilottery market,” Malul added.