Giant Both NetEnt and Evolution Gaming, a developer and provider specializing in live casino games, reported record second-quarter results this year. Notably, the two casino software providers attribute their strong second quarter to having successfully filled the void left by the interim sports betting-freeze.
As pioneers in their respective fields, NetEnt and Evolution Gaming are currently in the midst of Merger & Acquisition talks after Evolution made a bid to acquire NetEnt earlier this year. The iGaming titans credit their recent success to the fact that they can now provide their customers with casino games and entertainment whenever they want it.
The Real Strength of NetEnt
On the revenue front, NetEnt AB has also put on a spectacular show. The staggering 30.2% year-over-year growth in total revenue reported for the first half of the year is evident. This translates to actual sales of the brand approaching the $120.5 million threshold.
New casino licensing agreements between the provider and third parties have been a major factor. One hundred sixteen million dollars ($116,000,000) of the total income recorded for Q2 of 2020 was attributable to licensing agreements.
As was to be expected after NetEnt’s acquisition of top competitor-developer Red Tiger Gaming, the company accepted a 29% year-over-year drop in net profit. For the second quarter of 2020, they reported a net profit of $18.8 million.
Long-Term Success for Red Tiger
After spending a lot of money to acquire Red Tiger, NetEnt saw a significant drop in depreciation and amortisation. The overall 52.3% increase in these is what drove the $23.8 million uptick in D&A. In turn, financial costs rose dramatically, topping $22.8 million, a significant increase compared to Q2 of last year or Q1 of this year. In comparison, Q2 costs were only $3 million a year ago, a significant saving.
However, according to CEO Therese Hillman, Q2 saw the company’s casino revenue increase to unprecedented heights. Since both NetEnt and Red Tiger Gaming reported positive Q2 earnings, it’s safe to say that the brand’s temporary sacrifice in order to acquire Red Tiger was more than worth it.
The United Kingdom continues to be one of NetEnt’s most-supported major casino markets. The company has been putting in significant effort into breaking into the American market, and its early successes have been encouraging. Their growing presence and foothold in the U.S. has resulted in 10% of all gross gaming revenue reported for Q2.
The Ascendance of Evolutionary Gambling
Evolution Gaming, too, has shown great strength in the second quarter. Earnings per share for the live casino games company were essentially doubled in as little as three months. In the context of modern business, this achievement is unprecedented.
Evolution Gaming’s operational revenue for the second quarter of 2020 was more than EUR240 million, which is obviously more than a 50% year-on-year increase. Profits amount to €120 million out of this total.
The company’s future is in limbo while it awaits a response from NetEnt AB’s shareholders to its offer to acquire at least 90% of the shares in the casino software development. The 26th of October has been set as the final date for a response.