NeoGames reports a Q1 net loss and attributes it to transaction-related costs

NeoGames anticipates its planned purchase of Aspire Global to finalize this quarter, despite the fact that acquisition-related costs caused the company to incur a Q1 net loss.

This information comes as the group reports its performance for the three months that ended on March 31, 2022, with overall group revenue increasing by 3.8% year over year to $22.4 million (2021: $21.6 million).

NeoGames' income decreased little over the period by 0.7% to $13.2 million, while its portion of the 50/50 NeoPollard Interactive joint venture with Pollard Banknote climbed by 11.2% to $9.2 million (2021: $8.2 million).

Due in part to costs associated with the Aspire Global deal and higher G&A linked to further operational build-out, Q1 losses totaled $900,000, down from Q1 2021's $4 million in profits. As a result, adjusted EBITDA decreased by 12% to $8.5 million from Q1 2021's $9.7 million.

In addition, NeoGames revised its revenue forecast for the fiscal year from an earlier estimate of $90 million to $97 million to a more condensed range of $91 million to $96 million. This would imply an 11% YoY gain at the midpoint.

NeoGames' CEO, Moti Malul, stated: "Our business continues to trend well in 2022 as our current accounts continue to perform well in terms of both sequential and yearly growth rates.

"We are excited to note that our Virginia and Alberta accounts, which have grown to be major sources of income, have had particularly good growth.

"In an attempt to improve our product and broaden our geographic reach, we launched an offer to buy Aspire Global during the quarter.

"We have recently started our tender offer and have been intensely focused on completing this deal. We are optimistic about the development and anticipate closing in the second quarter.

The $480 million offer to buy all of Aspire Global's outstanding shares is split equally between equity and cash at 50% each.

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