LeoVegas Smashes Targets with Record Earnings

Swedish igaming giant revealed record earnings and increased profitability in Q2.

Swedish gaming giant LeoVegas released their Second Quarter Report on 1st August, showing continued growth and strong financials yet again.

The vitals:

  • Revenue increased by 76% to EUR 87.4 m (49.7).
  • EBITDA was EUR 15.0 m (6.1), corresponding to an EBITDA margin of 17.2% (12.4%).
  • Organic growth excluding markets closed in 2017 was 38%.
  • NGR from regulated markets was 38.8% (25.1%) of total NGR.
  • Net Gaming Revenue (NGR) from Royal Panda and Rocket X[2] accounted for 15.6% and 12.8%, of total NGR and strong margins.
  • The number of depositing customers was 309,987 (173,034), an increase of 79%.
  • Adjusted earnings per share were EUR 0.13 (0.05).

It was reported that both Royal Panda and Rocket X are developing in line with plans, with strong EBITDA margins of 30.0% and 21.8% respectively.

The results will be welcome news for Stefan Nelson who takes over the role of CFO from 22nd August 2018.

The record profits at LeoVegas were largely attributed to efficiency savings in marketing, resulting in lower costs. By adopting a truly data-driven approach to marketing, and not investing in channels that fail to deliver sufficient returns, LeoVegas bucked the trend of increasing advertising budgets during the World Cup, resulting in slightly slower growth but significantly increased profitability.

The LeoVegas team managed to achieve such impressive results despite some disruption with marketing links caused by the launch of a new front-end platform, and the industry-wide changes related to the introduction of GDPR – which resulted in the company stopping working with a large number of affiliates in the UK market.

LeoVegas also revealed their goal of achieving revenue of at least €600 million and an EBITDA of at least €100 million for the full year 2020.

In a major shift, LeoVegas has also made clear their intention to focus more on developing SEO and organic traffic, in an effort to drastically reduce their reliance on traffic routed from third-parties. Though this move mirrors other large igaming brands and is probably astute in terms of long term compliance and profitability, it will be unwelcome news for affiliates.

Gustaf Hagman, CEO and co-founder summed things up nicely, saying:

“A quarter with record earnings and new initiatives in sustainability and technology lays the foundation for continued strong growth”

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