Online gaming continued to drive 888 forward through 2021, as the operator lauds “a very successful year” which saw group-wide revenue surge 15.4 per cent to $980.1m (2020: $849.7m).
Gross profit during “another record year” increased 15 per cent across the year to $647m (2020: 562.8m), with the group stating that scale benefits and optimisation of third-party costs, including the use of its in-house sportsbook, were offset by the increase in gaming duties and taxes.
Profit before tax is up from $26.7m to $81.3m year-on-year, with adjusted EBITDA reaching $165m, a six per cent uptick from 2020’s $155.6m.
“It was another record year from a financial perspective, and we have truly transformed the scale of the business over the past two years,” stated Itai Pazner, CEO of 888.
“This step-change in scale has come from a clear market focus on regulated markets, which now make up three quarters of revenue, and where we are seeing really positive market share trends.
“We continued to leverage our competitive advantages around product leadership, brands, and customer excellence to improve the quality of products and the customer experience across sports and gaming, all the while maintaining our persistent focus on delivering our safer gambling priorities.”
On a segment by segment basis, B2C brought 15.7 per cent revenue growth to $941.9m (2020: $814.3m), reflecting a strong performance across core markets and expansion in growth regions.
Year-over-year growth for H1 came in at 41 per cent, driven by the group’s highest ever quarter through Q1, but a decline of four per cent was felt during the second half of the year.
This, says 888, was driven by the exit from the Netherlands and weaker than expected sports margins, which resulted in an overall decline in B2C revenue for Q4 of 14 per cent against a strong comparative period.
Gaming revenue increased 17.7 per cent over the prior year to $814.5m (2020: $692.2m), driven by the company’s casino product that generated 90 per cent of gaming revenue. Poker is reported as delivering a “solid performance”. Betting finished up at $127.4m, up 4.3 per cent from $122.1m YoY.
“The strong performance of record revenue in 2021 and double-digit growth was also in spite of the $70m-100m regulatory related revenue headwinds that we outlined in the prior year,” the company states in its latest financial report.
“These headwinds related not only to German regulatory changes, but principally to safer gambling measures we have taken, particularly in the UK, to reduce the potential for customers to experience harm.
“The full impact of these items was weighted more towards H2, resulting in H2 revenue being sequentially 17 per cent lower than H1, but in line with our expectations.
“These measures position the business well for any potential changes that may come as a result of the impending UK government review of gambling legislation.”
B2B revenue increased 7.7 per cent to $38.2m (2020: $35.4m), due to growth in both the bingo and US B2B businesses.
On a geographical basis, the UK increased 17 per cent YoY to $388.9m (2020: $333.5m) to occupy 40 per cent of total revenue, which is aligned to continued investments, with Italy up 37 per cent from $86.5m to $118.3m due to a “strong performance” across betting and gaming. The latter comprised 12 per cent of revenue.
EMEA (excluding the UK and Italy) reports a four per cent revenue rise to $333.5m (2020: $320.9m), accounting for 34 per cent of the total, with Romania, Ireland and Portugal pinpointed as demonstrating “strong growth trends”.
The Americas, where 888 notes that it has a “clear roadmap of state prioritisation, made up 13 per cent of total revenue after increasing 34 per cent to $125.6m (2020: $93.7m), with the rest of the world down nine per cent to $13.8m (2020: $15.1m).
Moving forward, 888 is planning to launch in “several new markets” during the current year, with Ontario, three to four additional US states, and the Netherlands all on the group’s radar.
Furthermore, daily revenues throughout January and February are reported to be up mid-single digits relative to Q4 2021, which reflects a double-digit decline relative to the prior year period but is said to fall in line with the board’s expectations “given regulatory and compliance headwinds”.
Pazner added: “Given this strong financial and operational performance, the board remains confident that, with 888’s advanced technology, products and diversification across markets, the group is well-positioned to deliver long-term sustainable growth for all its stakeholders into the future.”