NetEnt, the leading digital entertainment company, has released its interim results for the first quarter of 2016, announcing revenue growth by more than a third and operating profit by more than 50%.
Quote from Per Eriksson, President and CEO
“We have had a strong start to the year with high growth in revenues, profits and cash flow. In January we released the slot game Guns N Roses, which became our most successful game release so far. The game is part of our new concept NetEnt Rocks, which also includes upcoming games based on music and graphics of Jimi Hendrix and Motörhead. We have an exciting year ahead of us and I am positive about the future.”
First quarter 2016
· Revenues for the first quarter increased by 33.7% to SEK 345.4 (258.3) million
· Operating profit amounted to SEK 128.1 (81.8) million, an increase of 56.6%
· Operating margin was 37.1 (31.7)%
· Profit after tax amounted to SEK 121.7 (74.2) million, an increase of 64.1%
· Earnings per share amounted to SEK 3.04 (1.86) after dilution
· 9 new license agreements were signed, 8 new customers’ casinos were launched
Important events in the first quarter
· License agreement signed and games launched with PokerStars in New Jersey
· NetEnt became associated member of World Lottery Association (WLA)
· Administrative Court of Appeal ruled in NetEnt’s favor in tax dispute
· Guns N Roses slot game was released
· NetEnt won prestigious awards at International Gaming Awards, Gaming Intelligence Awards and EGR Nordic Awards
Comments from Per Eriksson, President and CEO
We have had a strong start to the year with high growth in revenues, profits and cash flow. Revenues for the first quarter increased by 33.7 percent and operating profit increased by 56.6 percent, compared to the first quarter of last year. The operating margin was 37.1 percent, a significant improvement from the same period last year thanks to rising revenues and economies of scale. The number of gaming transactions was 8.9 billion in the first quarter, representing an increase of 37 percent compared to the previous year.
We follow our growth strategy and the expansion in Europe and North America continues. We signed nine new license agreements and launched eight new customers’ casinos in the first quarter. We also extended our collaboration with PokerStars and went live with our games on their site in the state of New Jersey. We have successfully signed up all gaming operators in New Jersey and have quickly gained market share and traction with our games there, which is good for our future growth not only in New Jersey, but also in other US states if and when they decide to reregulate the online gaming market. Mobile games and the UK market continue to contribute significantly to our growth. Revenues from the UK almost doubled compared to the same period last year and mobile games represented 33 percent of our gamewin in the quarter, a sharp increase from the level of 21 percent last year.
In March NetEnt became associated member of the World Lottery Association (WLA), a member-based organization that promotes the interests of state-authorized lotteries and gaming operators around the world. The membership will support our efforts to gain business in this strategically important market segment. NetEnt continues to drive the market for digital casino entertainment by creating innovative games of the highest quality. We won several prestigious industry awards in the quarter and participated as usual at ICE – the largest trade show of the year in the European gaming industry. In January we released the much-anticipated slot game Guns N Roses, which became our most successful game release so far. The game is part of our new concept NetEnt Rocks, which also includes upcoming games based on music and graphics of Jimi Hendrix and Motörhead. We have an exciting year ahead of us and I am positive about the future.