- July 6, 2020
- Posted by: Stratford Team
- Category: Markets
Newgioco Group, Inc. (“Newgioco” or the “Company”) (Nasdaq: NWGI), a global sports betting and interactive gaming technology company providing fully integrated, omni-channel sports betting software solutions, announced its operating and financial results for the fiscal year ended December 31, 2019. The Company was delayed in filing its reports due to COVID-19 and the associated lockdowns in multiple international jurisdictions, with especially notable restrictions imposed by the Italian government.
Newgioco generated total revenue of approximately $35.6 million for the year ended December 31, 2019 compared to $34.6 million for the year ended December 31, 2018, representing a modest increase of approximately $1 million or 2.9%. The increase in revenue was primarily attributable to an increase in turnover, or betting handle, to approximately $454.1 million for the year ended December 31, 2019 from $413.2 million for the year ended December 31, 2018. Betting handle increased by approximately $41 million or 9.9%, which was on target with our growth estimates in Italy considering that there were no major international sporting events in 2019 compared to the prior year during which events such as the FIFA World Cup of Soccer occurred.
The increase in web-based handle of approximately $92.5 million or 39.2% was primarily due to the Company’s efforts to convert customers from land-based to online gaming.
Newgioco recorded a loss from operations of approximately $3.0 million compared to $0.2 million for the years ended December 31, 2019 and 2018, respectively, an increase of approximately $2.8 million. The increase in loss from operations was due to the increase in selling expenses associated to commissions paid to retail agents of approximately $3.5 million which was reflected in the growth of betting handle, coupled with costs associated with the acquisition of Virtual Generation, interest on convertible debentures, the costs of listing our shares of common stock on the Nasdaq Stock Market and expenses tied to our planned U.S. operations.
“We are very pleased with the results in our Italian operations during the year ended December 31, 2019. Despite the modest increase in revenue, we were intensely focused on organizational stabilization with the acquisition of Virtual Generation in January 2019, a key component of our betting technology roll-up strategy. The increase we experienced in handle is further evidence of market adoption of our leading-edge Elys betting platform considering that we managed to organically grow by about 9.9% despite the absence of any major international sporting events in 2019,” remarked Michele Ciavarella, CEO of Newgioco Group. “Anticipated legislative challenges that are ongoing in the regulated Italian market continue to factor in our strategy to position from land-based betting shops to web-based operations. Legislative maneuvers in Italy are expected to further bar entry of foreign and unregulated operators into the Italian market and the operational tactics we are employing are generating key metrics that measures market adoption of our products and services that savvy sports bettors demand. This key data could be crucial to our competitive advantage as we seek to drive into the U.S. markets.”
“Our regulated market know-how could be instrumental as we plan to expand into new geographical regions and new markets,” continued Mr. Ciavarella. “Looking forward to 2020 we have our sights firmly focused on the US market and believe our state-of-the-art betting platform, that is built from the ground up specifically for each market, may be highly sought after by new partners. We also believe that we are well positioned to increase our market share in the U.S. having successfully completed our Nasdaq listing in December 2019.”
The Company’s full financial report can be found on EDGAR through the following link: Nasdaq:NWGI SEC Filings
About Newgioco Group, Inc.
Newgioco Group, Inc., is a global leisure gaming technology company, with fully licensed online and land-based gaming operations and innovative betting technology platforms that provide bet processing for casinos and other gaming operators. The Company conducts its business under the registered brand Newgioco primarily through its internet-based betting distribution network on its website, www.newgioco.it as well as in retail neighborhood betting shops throughout Italy.
Newgioco offers clients a full suite of leisure gaming products and services, such as sports betting, virtual sports, online casino, poker, bingo, interactive games and slots. Newgioco also owns and operates innovative betting platform software providing both B2B and B2C bet processing for casinos, sports betting and other online and land-based gaming operators. Additional information is available on our corporate website at www.newgiocogroup.com.
Investors may also find us on Facebook® and follow us on Twitter @NWGI_gaming.
This press release contains certain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are identified by the use of the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions that are intended to identify forward-looking statements and includes, among other aspects, statements regarding regulated market know-how being instrumental as we plan to expand into new geographical regions and new markets, our state-of-the-art betting platform being highly sought after by new partners, being well positioned to increase our market share in the US, legislative maneuvers in Italy being expected to bar further entry of foreign and unregulated operators into the Italian market, and key metrics that measure market adoption of our products and services that savvy sports bettors demand being crucial to our competitive advantage as we seek to drive into the U.S. markets. These forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and are subject to a number of risks and uncertainties, many of which are difficult to predict that could cause actual results to differ materially from current expectations and assumptions from those set forth or implied by any forward-looking statements. Important factors that could cause actual results to differ materially from current expectations include, among others, the Company’s ability to expand into new geographical regions and new markets, the Company’s ability to increase its market share in the US, as expected, the duration and scope of the COVID-19 outbreak worldwide, including the impact to the state and local economies, and the risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and its subsequent filings with the U.S. Securities and Exchange Commission, including subsequent periodic reports on Form 10-Q and current reports on Form 8-K. The information in this release is provided only as of the date of this release, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events, except as required by law.
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we reference in this press release the terms “turnover”, “handle”, “betting handle”, “web-based handle” which are not recognized under GAAP and are regarded as non-GAAP measures. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.
We use these non-GAAP financial measures to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and that may not be indicative of our ongoing core operating performance. We believe that both management and investors may benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and when planning, forecasting, and analyzing future periods. Additional information relating to certain of these non-GAAP measures can be found in the Management’s Discussion and Analysis section, Item 7 of Newgioco’s Form 10-K filed on July 2, 2020 for the period ended December 31, 2019 which is available on the SEC EDGAR filing system at www.sec.gov and on Newgioco’s website at www.newgiocogroup.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200706005324/en/