NetEnt Q3 revenue rises 17% as EBITDA reaches record levels

NetEnt has reported 17% year-on-year growth in group revenue to SEK521m (£45.4m) for Q3 2020. The Stockholm-listed supplier confirmed EBITDA of SEK310m, corresponding to a margin of 60% to mark a new record for the business. NetEnt attributed the record EBITDA to continued cost cutting and a deeper integration of the Red Tiger brand into its operating model. Regulated markets accounted for 52% of total GGR during Q3, with 90% of GGR coming from slots games, compared to just 10% from table games. The percentage of revenue generated from the US market increased by 7% during Q3, with 8% declines in revenue generated by NetEnt’s core Nordic and European markets. The percentage of revenue generated from the UK and rest of the world segments rose by single digits during the same period, by 7% and 2% respectively.

NetEnt’s US market GGR increased by 313% year-on-year and accounting for 10% of total group GGR in the quarter. NetEnt concluded several B2B supply deals in the quarter with operators including DraftKings, William Hill, Tipico, Wind Creek, BetMGM and The Cordish Companies. NetEnt’s live casino operations enjoyed a stellar Q3 with GGR up 109%. The supplier attributed this to a high pace of growth with existing customers but highlighted a slowdown in new live casino sales. “During the quarter we continued to invest in our strategic growth areas of the USA, Red Tiger and live casino, while driving cost and revenue synergies from the ongoing integration between NetEnt and Red Tiger,” NetEnt CEO Therese Hillman said. “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. “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 cashflow for the rest of the year and beyond,” she added. The supplier hailed several Q3 projects as potentially driving financial growth in Q4, including the launch of Red Tiger games in Pennsylvania under NetEnt’s licence in November. It also pointed to the launch of a new live casino game called Roulette Max in December and the expansion of its live studio in Malta as possible growth points over the next quarter. Evolution and NetEnt released simultaneous Q3 results, reflecting their soon-to-be-completed merger.