Playtech 2024 revenue up 10% on Americas B2B gains

Total revenue from Playtech plc continuing operations in 2024 hit €848 million (£706.9 million/$912.6 million). This comfortably surpassed the previous year, according to its earnings published today (27 March). Adjusted group revenue increased 10% to €848 million.

Playtech plc set out several different sets of figures to represent the changing nature of its business. Continuing operations no longer include Snaitech, which Playtech agreed to sell to Flutter for €2.3 billion in September last year.

When including Snaitech and other discontinued operations, group revenue for the year increased by 5% year-on-year to €1.79 billion. However, subject to Italian anti-trust approval, the Snaitech sale will complete in Q2, with Playtech no longer classing it as a continuing operation.

Looking ahead, Playtech is doubling down on its role as a pure play B2B provider, as it has commenced a sale process for its Happybet German assets.

Group CEO Mor Weizer said Playtech’s core B2B business had “an outstanding year, achieving the medium-term target it set two years ago, ahead of schedule”.

“The Americas saw substantial revenue growth, with Wplay in Colombia delivering a particularly strong performance.

“Meanwhile, our expansion in the US and Canada continues to gain momentum as we sign up and launch with a growing list of operators,” he said.

Switch back to B2B paying dividends for Playtech

Breaking down revenue performance in 2024, the group’s B2B segment, which only includes continuing operations, reported a revenue increase of 10% to €754.3 million. This was mainly driven by growth in the US and Colombia, though Playtech also noted success in Canada, Italy, Spain and UK.

Overall B2B revenue in the Americas was up 19%, helped by a strong performance in the US and Canada (growth of 126%), with multiple operators contributing. Playtech anticipates further growth, should online gambling regulation come into effect as expected in Alberta and British Columbia in coming years.

The supplier said its Brazil-facing revenue grew “very strongly in FY 2024” and will be classified as regulated revenue from Q1 2025’s results.

Its Caliplay JV reported “strong underlying performance”, although no specific figures were given. However, this was impacted by legal fees from the dispute, as well as interest fees and adverse exchange rates. Playtech resolved its dispute with Caliplay partner Caliente in September.

As part of the agreement, Caliplay resumed paying its disputed software and services fees to Playtech. More than €150m – approximately 80% – of the unpaid fees were received last year.

Elsewhere, UK B2B revenue climbed 8%. Growth across multiple operators was partly offset by a decline relating to one customer insourcing its self-service betting terminals.

As for the rest of Europe, B2B revenue saw a slight decline of 1%. Strong growth in Spain and Italy was offset by declines in Greece, due to a contract loss, as well as in Poland and the Netherlands.

B2C revenue rises despite loss of Snaitech

Turning to B2C, continuing operations –including Sun Bingo and Happybet – generated €97.8 million in revenue. This beat the previous year by 7%. This figure did not include Snaitech’s performance.

Including Snaitech’s performance, overall B2C revenue was up 2% to €1.05 billion.

Happybet revenue was up 4% in 2024, driven by the retail segment in Germany, but it recorded an adjusted EBITDA loss of €11.8 million. This was impacted by the closure of its Austrian business in H2. Failing its ability to sell off HappyBet’s German assets, the group said it would consider a disposal of the business.

Sun Bingo and other B2C operations recorded 7% revenue growth in 2024 to €78.8 million.

Revenue from Snaitech increased 1%, impacted negatively by customer-friendly sporting results. Retail revenue was flat, though betting sales in this segment were up 6%. Retail gaming machine revenue, however, slipped 2%.

Snaitech’s online revenue was up 3%, with casino offset by unfavourable sports betting results early in the year.

“The under-penetration of the online segment continues to be a powerful structural tailwind for the business, with Snaitech well-placed to benefit given the strength of the Snai brand, the continuous improvements to apps and technology and a broadening of its content offering,” Playtech said.

Mixed news on the bottom line for Playtech

In terms of costs, earnings and profit, Playtech has again presented data with both actual and adjusted figures. While top-line revenue remains unchanged, figures do differ when looking across the business.

Costs for continuing operations were higher across the board than in 2023. As such EBITDA slipped 16% to €127.7 million.

After non-operating costs, including both depreciation and amortisation, pre-tax loss from continuing operations hit €9.4 million, compared to a €70.4 million profit in the previous year.

Income tax payments totalled €127.1 million, meaning a net loss of €136.5 million from its continuing operations. This is compared to the €12.1 million loss posted at the end of 2023.

However, when including €112.3 million in pre-tax profit from discontinued operations, such as Snaitech, this helped matters. Playtech also noted an additional €12.7 million in foreign exchange gains.

As such, absolute bottom-line – based on actual figures – was an €11.5 million loss, compared to a €97.4 million profit in 2023.

Looking to the adjusted figures, costs were higher year-on-year, but EBITDA also increased by 22% to €214.7 million. Adjusted profit from continuing operations jumped 87% to €99.5 million, while after-tax net profit was €58.5 million, up 312%.

When adding pre-tax profit from discontinued operations, this resulted in an increased net profit of €223.2 million, a rise of 42%. After also including €12.7 million in foreign exchange gain, this left a bottom-line adjusted net profit of €235.9 million up 58%.

‘Landmark’ year for Playtech, says CEO

Commenting on the results, Weizer was positive, describing 2024 as a “landmark” year for the business. He also talked up future prospects for Playtech following the sale of Snaitech.

“The combination of Playtech’s industry-leading technology with its exposure to attractive markets underpins our confidence in the group’s new medium-term targets. We are excited about the future and the many opportunities ahead.”

Looking ahead, the supplier has forecast a new medium-term adjusted EBITDA target of €250 million  to €300 million for continuing operations. This will reflect the revised terms of the Caliplay agreement.

What have the analysts said?

Industry analyst Regulus Partners acknowledged the mixed performance across all markets but noted the US was a highlight for Playtech plc.

Looking forward, Regulus said the sale of Snaitech will put Playtech “back to its roots”. This, analysts say, will not necessarily be a positive, with the Happybet and Sun Bingo brands a “distraction and value drag”.

“Happybet appears to be structurally heavily loss-making, while Sun Bingo is structurally relatively small and low margin, at least under Playtech,” Regulus said.

“Playtech’s key strengths in PAM/CRM and investment-led strategic partnerships create a highly resilient business, but in-house content continues to lose share to an increasingly dynamic and disaggregated supply chain.

“While this pressure on market share and margin has been visible for about a decade – and was possibly a reason to buy Snai in the first place – Playtech has still not provided an answer to ten years of structural under-performance, in our view,” the note said.