Lottomatica considers M&A options following record Q1

Lottomatica’s Record Q1 Performance: A Potential for Further M&A Expansion

Lottomatica has reported remarkable first-quarter revenues totaling €584.5 million ($659.8 million), showcasing a robust growth trajectory with double-digit increases across its online and sports betting segments. In a recent analyst call following the earnings announcement, Lottomatica’s management conveyed that the company is open to pursuing additional mergers and acquisitions (M&A) as it seeks to further enhance its market offerings.

The company’s Q1 revenue marks a significant 33% increase from the previous year, establishing it as the highest first-quarter revenue in Lottomatica’s history. This impressive performance is primarily attributed to substantial growth in both the online and sports betting divisions, each recording a staggering 59% rise in revenue year-on-year, alongside increases in total betting activity across the board.

CEO Guglielmo Angelozzi stated that this record-setting quarter positions Lottomatica favorably for a successful year ahead. “We have made a commendable start in 2025. The online market is flourishing impressively, with sports payout rates also reflecting a substantial improvement both online and in retail, surpassing normalized levels from last year,” he noted.

Anticipating Future M&A Activities at Lottomatica

With such promising results in Q1, Angelozzi addressed inquiries regarding potential M&A opportunities. The previous acquisition of SKS365 in April 2024 has yielded clear benefits, positively influencing the company’s FY24 results. Angelozzi emphasized Lottomatica’s commitment to a disciplined approach in evaluating prospective acquisitions. “We exercise a strong filter regarding any potential additions, focusing on asset quality and maintaining strict price discipline,” he stated. “There are inherently some intriguing opportunities that we are actively scouting and are prepared to act upon.”

Chief Financial Officer Laurence Van Lancker reiterated the company’s M&A strategy, focusing on Europe’s regulated B2C market and its associated verticals. “Opportunities continue to manifest in our pipeline, and we remain steadfast in our selective and cautious approach toward pricing,” he remarked, highlighting Lottomatica’s sustained strategy of pursuing bolt-on acquisitions while adhering to strict financial guidelines.

In addition, Angelozzi reported that Lottomatica is well-positioned to withstand possible incoming tariffs in the U.S. “Our resilience to tariffs is notable; indeed, we believe our business model is robust against macroeconomic challenges,” he explained, drawing on past resilience through economic downturns, including high inflation and the global financial crisis.

SKS365: A Catalyst for Growth in Online and Sports Betting

The inclusion of SKS365, which is now termed PWO under Lottomatica, has significantly contributed to the surge in online and sports betting revenues for Q1. The online segment has emerged as the primary revenue driver, reporting a 59% increase to €239.8 million. Similarly, the sports betting division experienced a 59% year-on-year revenue growth, reaching €150.4 million, supported by favorable sports payout data during the quarter.

Interestingly, the gaming segment did not capitalize on the SKS365 acquisition, maintaining stable revenue levels at €195.5 million in Q1. Betting volumes also revealed the acquisition’s impact: online bets surged by 46% to €7.36 billion, while sports betting wagers increased by 27% to €1.05 billion. Notably, gaming wagers dipped by 3% to €2.77 billion.

Moreover, the revenue growth propelled adjusted EBITDA to a new Q1 record of €220.5 million, marking a significant 47% increase. Online adjusted EBITDA saw a remarkable 55% rise, while sports betting adjusted EBITDA soared by an impressive 132%. Conversely, gaming adjusted EBITDA experienced a slight decrease of 1% this quarter.

Net Profit Exceeds €50 Million

Despite rising operating costs and higher depreciation, amortization, and impairment charges, Lottomatica reported a pre-tax profit of €77.8 million for the quarter, reflecting a 49% increase from the previous year. After accounting for €26.3 million in taxes, the net profit reached €51.5 million, showing a remarkable year-on-year growth of 71.9%. Ultimately, after adjusting for €1.3 million in net profit from non-controlling assets, the net profit attributable to Lottomatica stood at €50.3 million, representing an impressive 77.7% increase.