Super Group, the parent company of Betway and Spin, has announced its financial results for the second quarter of 2024, showcasing a period of notable revenue growth alongside a shift in profitability.
A Mixed Financial Picture
In the second quarter of 2024, Super Group achieved total revenue of €414.7 million ($453.1 million), reflecting a solid 9% increase compared to the same period in the previous year. This growth underscores the company’s ability to expand its revenue streams in a competitive market. However, this positive trend in revenue contrasts with a significant decline in profitability. The company reported a net loss of €0.8 million for the quarter, a stark reversal from the €27.6 million profit earned in Q2 2023.
The shift from profit to loss highlights the impact of various internal and external factors on Super Group’s financial health. While the revenue growth is encouraging, the decline in profitability signals underlying challenges that need to be addressed.
Regional Performance: Contrasts and Contributions
The company’s regional performance has been a major driver of its financial results, with notable variations across different markets. Africa and North America emerged as key contributors to the overall revenue growth. Specifically, Betway saw its highest revenue from Africa and the Middle East, totaling €152.8 million, which represents 62% of its revenue in this segment. Similarly, Spin’s primary revenue source was North America, which contributed €111.8 million, accounting for 66% of its revenue.
Conversely, the Middle East and Asia-Pacific regions experienced declines that partially offset the gains from the more robust markets. The reduced performance in these regions reflects a complex global landscape where regional challenges can significantly impact overall results.
Product Line Dynamics: Online Casino and Sports Betting
Super Group’s product lines showed a diverse performance during the quarter. The online casino segment experienced a substantial increase, with revenue rising by 18.6% year-on-year. This growth highlights the segment’s strong market position and consumer demand. In contrast, sports betting revenue fell by 10.5%, signaling a decline in this area of the business. Additionally, revenue from brand licensing and other streams also decreased, contributing to the overall challenges faced by the company.
These fluctuations in product line performance indicate shifting consumer preferences and market dynamics that Super Group must navigate. While the online casino sector continues to thrive, the decline in sports betting and other revenue streams suggests areas needing strategic adjustment.
Management’s Strategic Outlook
CEO Neal Menashe expressed a positive outlook on the company’s progress despite the financial challenges. He emphasized the significance of closing the US sports betting market as a strategic move and highlighted ongoing efforts to optimize Super Group’s global footprint. Menashe also pointed to recent sponsorship deals, including partnerships with Manchester City and South Africa’s Premier Soccer League, as key achievements for the company.
“The second quarter of 2024 was our strongest quarter ever and demonstrates the exceptional progress we continue to make as a business. I’m glad we have reached a conclusion in shutting the US sports betting market and we continue more generally to optimise our global footprint both in terms of geography and product. I’m really excited to welcome English Premier League champions, Manchester City, and South Africa’s Premier Soccer League, now known as the Betway Premiership, to our brand sponsorship portfolio. Our outlook for the remainder of the year is strong, and we look forward to making 2024 a super year for Super Group.”
CFO Alinda van Wyk also provided insights into the financial performance, noting new quarterly records for the ex-US business, including total revenue of €408 million and adjusted EBITDA of €98 million. She highlighted the company’s successful focus on growth in key markets and cost efficiencies, which contributed to a strong ex-US EBITDA margin of 24%. Van Wyk’s confidence in raising the ex-US adjusted EBITDA guidance for the full year to over €300 million reflects a positive outlook based on the company’s strong performance in the first half of the year.
“We achieved new quarterly records for the ex-US business for both total revenue of €408m and adjusted EBITDA of €98m. The continued focus of growth in key markets, along with the significant progress made on realising cost efficiencies, contributed to a strong second quarter ex-US EBITDA margin of 24%. Given the strength we have seen in the first half of the year, we are confident in raising our ex-US adjusted EBITDA guidance for the full year 2024 to greater than €300m. Finally, our debt-free balance sheet continues to show strength, and we were pleased to return capital to shareholders through the announcement of our first-ever dividend.”
Comparative Industry Performance
In the broader industry context, Zeal Network reported impressive results for the first half of 2024, with a 40% increase in revenue and a 46% rise in EBITDA. This strong performance from Zeal Network highlights the competitive nature of the online gambling sector and provides a comparative benchmark for Super Group’s results.
Super Group’s financial results for Q2 2024 reflect a period of substantial revenue growth and strategic progress, tempered by a decline in profitability. The company’s focus on optimizing its global operations and expanding its brand portfolio will be critical in addressing current challenges and driving future success. As Super Group navigates these dynamics, its performance will continue to be closely watched in the evolving landscape of the online gambling industry.