NeoGames, a provider of online lottery platforms, saw a 46.5 percent increase in sales in the first quarter, while total net income increased by 4.8 percent year over year, due in part to income from its NeoPollard joint venture.
NeoGames’ revenue was $13.3 million, up from $9.1 million in the first quarter of 2020.
Expenses, on the other hand, increased by 42.3 percent to more than $11 million. Distribution costs increased 108.8 percent year over year to $2.6 million. Development costs totaled $2.2 million, up 18.8 percent from the first quarter of 2020.
As compared to the previous first quarter, selling and marketing expenditures dropped from $446,000 to $278,000, a 37.6 percent decline. Administrative and administrative costs increased 71.6 percent year on year to $2.6 million, while depreciation and amortisation increased 23.9 percent to $3.5 million.
In total, expenditures totalled $11.1 million, a 43.3 percent rise over the first quarter of 2020. The operating profit was $2.1 million, up 72.7 percent year over year.
Interest on funding costs of $1.1 million and finance expenditures of $224,000 reduced the profit to $763,000. Expenses for income taxes, which totalled $657,000, further lowered profit to $106,000.
However, NeoGames earned $3.8 million from its NeoPollard Interactive (NPI) joint venture with Pollard Banknote in Canada. The joint venture produced $8.2 million in revenue.
Following this revenue, NeoGames’ total net income was $3.9 million, up $4.8 million from Q1 2020.
Furthermore, adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) totaled $9.7 million, up 147.8 percent from the previous first quarter.
Moti Malul, chief executive officer of NeoGames said: “These results further demonstrate the strength of our comprehensive offering across technology, games and services, which fuels our ability to drive consistent growth across all our accounts.” said Moti Malul, chief executive officer of NeoGames.
“We are seeing solid player retention rates, allowing us to build off of the momentum from the past year, as the major economies and countries where we operate re-open.”
In its first performance after its IPO, NeoGames saw a 48.8 percent increase in sales in 2020, aided by its expansion into North America.