NetEnt growth stays sluggish in Q3

NetEnt has reported Q3 revenues of SEK 449.3m (£38m), an 11% uptick in real terms but up just 1.8% in constant currency.

EBITDA grew by 16.4% to SEK227m (£19m), also boosted by currency fluctuations, with EBITDA margin increasing slightly to 50.6%.

“We continue to make efforts to lower overhead costs and to optimize the organization for commercial drive and increased pace of output, and I see room for improvement next year in several areas,” said group CEO Therese Hillman.

Regulus Partners said the underlying low single-digit growth reflected slowing growth in Northern European markets and the increasing important of product differentiation over churn.

Hillman also highlighted the firms ongoing efforts to “move closer to the end users in the value chain”, through its new affiliate site and a social casino offering.

“We need to keep delivering the best casino games from a player perspective and make our brand visible,” Hillman said.

UK and Sweden remain the provider’s largest markets (14% of revenue), with locally regulated revenue accounting for 35% of total revenue.

Regulus projected this number to rise to 50% in 2019 thanks to deals with the likes of Norsk Tipping, ATG, Svenska Spel, Veikkaus and British Columbia Lottery Corporation.

NetEnt also announced this morning a new deal with Penn National to provide online casino games for the regulated Pennsylvania market.

“This deal marks NetEnt’s first customer signing for Pennsylvania and is an important step in our growth strategy in North America,” said Erik Nyman, managing director NetEnt Americas.

“I look forward to our collaboration with Penn National and believe that our entertaining online games will be much appreciated by players in Pennsylvania.”

NetEnt’s share price was up 10% from open at the time of writing.