Entain Q3 financial results show negative customer-friendly sports results but positive increases in online and retail NGR & active customers! (Photo by AlphaTradeZone on Pexels)
Entain, the global sports betting and iGaming giant, released its Q3 financial results for 2023.
The report was weaker than expected, and the company share price opened at 907.80 GBX on the release, and after a brief runup, the stock closed at 907.80 GBX. The company expected higher growth in Europe and Australia but was impacted by customer-friendly results and ongoing regulatory issues in the U.K. ENT was hit hardest by betting losses in the 5 major European football leagues.
EBITDA was impacted by the mandatory regulatory levy in the U.K. because substantial investments were made to enhance responsible gaming and to improve the company’s long-term prospects.
Entain’s Q3 net gaming revenue rose 7% (including the U.S.) in the third quarter. However, the revenue slipped by 6% on a pro forma basis. The online NGR rose 9%, revised in September, despite a 6% pro forma decrease. While these figures are poor, the company enjoyed a 26% increase in active customers. Retail NGR also suffered as growth was 4%, with a pro forma decrease of 4%.
In simple terms, Entain’s total income from gambling and betting increased by 7% when looking at their actual financial reports. However, when the company considers certain adjustments or factors like mergers or acquisitions (pro forma basis), their revenue decreased by 6%. So, the 7% increase is the official number, but when accounting for specific changes, their income went down by 6%.
Entain Shares Recently, Entain has shown mixed share price results. In the most recent iGaming Stocks Update Issue 22 2023, Entain has pulled back -32.40% from its January 2023 market open price of 1,350.50 GBX. Today, at the close of the UK market, shares were 909.20 GBX, while the yearly high was 1587.50 GBX in February 2023. The share price is now at the lowest point since September 2020, when the price rose through the 800 GBX mark.
Entain Q3 2023 Financial Results Summarised
While the company’s growth slowed in Q3, they maintain that full-year EBITDA will be between £1b and £1.05b, which aligns with previous forecasts.
Through sports betting and iGaming, the partnership with BetMGM in the United States saw revenue growth of 8%. In the states where they operate, Entain has a 26% market share in iGaming and an 18% market share in sports betting.
Highlights from the Entain BetMGM Investment
NGR – 8% increase
Sports Betting – 18% market share
iGaming – 26% market share
| Financial Metric | Reported Change | Additional Information |
|---|---|---|
| Overall NGR | Increased by 7% | N/A |
| Online NGR | Increased by 9% | N/A |
| Customer-friendly sports results | N/A | Decreased by 2 to 3% |
| Active customers | Increased by 26% | Year-on-year increase |
| Retail NGR | Increased by 4% | N/A |
| EBITDA (Full Year) | N/A | Between £1b and £1.05b reaffirmed |
*The official financial results are available via the Entain financial results centre.
Rounding Up the Results
Entain continues to battle headwinds, mainly U.K. gambling regulations and customer-friendly results, adversely affecting their Q3 financial report. The company stated that it will focus on lucrative growth markets in Brazil and the U.S. because of the profit margin potential. One of the highlights of the report was the BetMGM metrics. This 50-50 partnership has been a primary driver for organic growth in the U.S. and significantly contributed to its overall NGR.
To maintain its position in the market, Entain will prioritise markets with high growth potential and streamline its operational costs to enhance shareholder returns. This strategy will strengthen Entain’s competitive edge and deliver positive full-year results in the coming months.
As Entain bid to overtake STS, the STS company showed it reported financials and rises in share prices. This was evident in the STS Group Sees Stellar Q2 Growth as Entain Acquisition Looms report by Matthew O’Connor|on 2 July 2023. Entain overtook the Polish group in a deal worth £750m deal. Of course, shares in BetMGM have thus far been slow.
As for Entain’s 50/50 partnership with BetMGM, the investment is still paying off. In effect, Entain is a 50% owner of LeoVegas and Royal Panda online casino platforms operating globally in UKGC, MGA, AGCO, and other large iGaming markets. The investment appears to be paying off, especially after BetMGM recorded a net revenue of US$ 944 Million in H1 2023. The full-year revenue for BetMGM estimates are US$ 1.8 to US$ 2.0 billion.
Previous Entain Financial Reports: The last time we reported on Entain’s financial performance was back in Q1 2023. We appear to have missed the Q2 results. For a comparison of the current Q3 2023 Financial Results, I was hoping you could look at the Entain plc Q1 2023 Financial Performance published by myself on 30 April 2023.
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