Revenue rises at Playtech in 2024 on Americas B2B gains

Playtech has reported a remarkable 10% year-on-year increase in revenue from continuing operations for its fiscal year 2024, primarily driven by robust growth within its B2B segment across the Americas.

The total revenue from Playtech plc’s continuing operations reached €848 million (approximately £706.9 million or $912.6 million) in 2024, markedly surpassing last year’s figures, as detailed in its latest earnings release on March 27. Adjusted group revenue experienced a similar 10% uptick to €848 million.

Playtech has delineated several metrics to demonstrate the evolving landscape of its business. Notably, continuing operations no longer encapsulate Snaitech, which Playtech is in the process of divesting to Flutter for €2.3 billion, a transaction set in motion in September of the previous year.

When accounting for Snaitech and other discontinued operations, total group revenue experienced a 5% increase, totaling €1.79 billion. It is important to highlight that upon the completion of the Snaitech sale in Q2, pending Italian anti-trust approval, Playtech will exclude this entity from its continuing operations.

Looking forward, Playtech is firmly committed to fortifying its position as a pure-play B2B provider and has initiated a sales process for its Happybet assets in Germany.

Mor Weizer, Group CEO, remarked on the “outstanding year” for Playtech’s core B2B business, affirming that it has exceeded its medium-term targets set two years ahead of schedule.

“The Americas reflected significant revenue progress, with Wplay in Colombia standing out with an exceptional performance,” Weizer noted. “Simultaneously, our expansion efforts in the US and Canada continue to accelerate as we onboard a growing roster of operators,” he added.

The Return to B2B Yielding Strong Results for Playtech

In disaggregating the revenue performance for 2024, Playtech’s B2B segment, limited to continuing operations, saw a notable revenue growth of 10%, totaling €754.3 million. This growth was largely attributed to performance enhancements in the US and Colombia, with additional successes reported in Canada, Italy, Spain, and the UK.

Overall, B2B revenue in the Americas soared by 19%, buoyed by substantial contributions from the US and Canada, experiencing an impressive 126% growth from multiple operators. Playtech anticipates further advancements, particularly as online gambling regulations are expected to be enacted in Alberta and British Columbia in the forthcoming years.

In a positive development, Playtech reported that its revenue from Brazilian operations surged significantly in FY 2024, positioning it favorably to be classified as regulated revenue starting in Q1 2025.

While the Caliplay joint venture exhibited a “strong underlying performance,” specific figures were not disclosed. The operation faced legal fees due to a dispute but has now resolved issues with its partner Caliente, leading to the resumption of payment for disputed software and services fees, amounting to over €150 million (approximately 80% of outstanding amounts) received last year.

In the UK market, B2B revenue grew by 8%. However, this growth was partially mitigated by a decline from one client that shifted to insourcing its self-service betting terminals.

Regarding continental Europe, B2B revenue dipped slightly by 1%. While Spain and Italy demonstrated strong growth, challenges emerged in Greece due to a contract loss, combined with declines in Poland and the Netherlands.

B2C Revenue Growth Despite Snaitech’s Sale

On the B2C front, continuing operations—including Sun Bingo and Happybet—generated revenues of €97.8 million, reflecting a 7% year-over-year increase, excluding Snaitech’s contributions. When Snaitech’s performance is included, overall B2C revenue saw a modest increase of 2%, amounting to €1.05 billion.

Happybet’s revenue rose by 4% in 2024, driven by its retail sector in Germany, though it reported an adjusted EBITDA loss of €11.8 million due to the closure of its Austrian operations in the second half of the year. Should efforts to divest Happybet’s German assets not materialize, the group is prepared to consider full disposal of the business.

Sun Bingo and other B2C operations also fared well, with a 7% revenue increase in 2024, totaling €78.8 million. Meanwhile, Snaitech’s revenue rose 1%, although this was impacted by less favorable outcomes in sports betting. Retail revenue remained steady, while betting sales in this sector increased by 6%. However, retail gaming machine revenue experienced a slight decline of 2%.

Snaitech’s online revenue climbed by 3%, although it was hampered by adverse sports betting results early in the year. Playtech noted that the under-penetration of the online segment continues to serve as a significant structural advantage for the business, with Snaitech well-positioned for growth, thanks to the robust Snai brand and ongoing technological enhancements.

Mixed Financial Results for Playtech

In terms of expenses, earnings, and net profit, Playtech has presented both actual and adjusted figures. While overall revenue remained stable, discrepancies emerged when evaluating performance across the business.

Costs for continuing operations have risen compared to 2023, leading to a 16% decline in EBITDA to €127.7 million. Following non-operating costs, including depreciation and amortization, Playtech reported a pre-tax loss from continuing operations of €9.4 million, a stark contrast to the €70.4 million profit recorded the previous year.

Income tax payments amounted to €127.1 million, resulting in a net loss of €136.5 million from continuing operations, up from the €12.1 million loss in 2023. However, when factoring in a pre-tax profit of €112.3 million from discontinued operations such as Snaitech, the outlook appeared more favorable. Moreover, Playtech recognized an additional €12.7 million from foreign exchange gains.

This resulted in a net loss of €11.5 million based on actual figures, a significant decline from the €97.4 million profit reported in 2023. When analyzing adjusted figures, costs increased year-over-year, yet EBITDA surged by 22% to €214.7 million. Adjusted profit from continuing operations skyrocketed by 87% to €99.5 million, while after-tax net profit increased a staggering 312% to €58.5 million.

When incorporating pre-tax profits from discontinued operations, this elevated adjusted net profit to €223.2 million, reflecting a 42% increase. Including €12.7 million in foreign exchange gains, the adjusted net profit climbed to €235.9 million, a notable rise of 58%.

A ‘Landmark’ Year for Playtech, as Affirmed by CEO

Commenting on these results, CEO Mor Weizer expressed optimism, characterizing 2024 as a “landmark” year for Playtech. He emphasized the promising outlook for the company following the impending sale of Snaitech.

“The synergy of Playtech’s industry-leading technology and access to lucrative markets bolsters our confidence in the company’s revised medium-term targets. We are enthusiastic about the future and the plethora of opportunities that lie ahead,” Weizer stated.

Looking forward, Playtech has set a new medium-term adjusted EBITDA target of €250 million to €300 million strictly from continuing operations, which aligns with the restructured terms of the Caliplay agreement.

Analysts Weigh In

Industry analysts at Regulus Partners observed the mixed performance across diverse markets, noting significant opportunities in the US for Playtech plc. They predict that the forthcoming sale of Snaitech will enable Playtech to re-align with its core business model.

“While returning to its roots may not be universally advantageous, as brands like Happybet and Sun Bingo might distract and devalue the core offerings, we believe that Playtech’s strengths in PAM/CRM, coupled with strategic partnerships, present a resilient business model,” Regulus noted.

However, challenges persist as in-house content continues to cede market share to an increasingly competitive and fragmented supply chain. “For nearly a decade, these pressures have contributed to Playtech’s structural under-performance, raising questions about its strategic decisions, particularly with the acquisition of Snaitech,” the report concluded.