Entain posts record online revenue in Q4, closes FY22 with profit above expectations

Sports betting giant Entain has shared its financial results for the last quarter of 2022, posting a new quarterly record for both online net gaming revenue and active customers. The group also posted an update for the entire financial year of 2022, for which it expects its core profit to be between £985 million and £995 million ($1.21 billion - $1.23 billion), up from an earlier forecast of between £925 million and £975 million.

Jette Nygaard-Andersen, Entain’s CEO, said: “2022 has been another year of strong financial, operational and strategic progress for Entain. We have continued to grow our revenues in a sustainable and diversified way by expanding our global footprint, broadening our customer appeal, entering new areas of entertainment, and providing a safe environment for our customers.” 

“All of this has led to a record number of active customers in Q4, as well as a full year EBITDA performance ahead of our previous expectations,” she noted. “We have started 2023 with good momentum across the business and remain confident in our ability to continue delivering on our growth and sustainability strategy in the year ahead.”

The company concluded the year with a strong performance, with group net gaming revenue up 11% in Q4. Entain’s record performance within the online segment – where NGR was up 12% – was credited to a successful World Cup, with the soccer boom partly offset by weather disruptions to sporting fixtures.

Entain also continued its growth trajectory in active customers during the quarter, also at record levels, up 14% versus the prior year. And also as important, retail’s rebound could also be felt during Q4, with net gaming revenue for the vertical up 10%, and UK volumes driven by strong growth in gaming and betting terminals.

Group revenue for the entire fiscal year 2022 echoed the results obtained in Q4, up 12% from a year earlier. The expected FY22 EBITDA in the range of £985 million and £995 million is ahead of expectations and previous forecasts. Including the 50% share the company has on BetMGM, its joint venture in the US with MGM Resorts, group NGR was up by a notable 15%. 

The company’s strong FY22 performance came despite a 1% drop in online gaming revenue, which the business says reflects strong Covid comparators and the absorption of regulatory changes, particularly in the UK and Germany. In contrast, retail grew by a whopping 66%, with volumes ahead of pre-Covid levels, market share gains and a broadening customer base.

In its trading update, Entain noted “strong” progress on the strategic broadening of its customer appeal, with the number of active customers up 7% year on year. The past year saw the gaming group expand into new markets and close a number of deals, including Croatia's SuperSports purchase in November, which contributed £8 million ($9.8 million) to FY22 EBITDA, driving further growth and geographic diversity through the recently established Entain CEE.

Subsequent to Q4, Entain's expansion plans continued with the acquisition of BetCity in January 2023, securing access to the “attractive and fast-growing” Netherlands market. And during 2022, the group also re-launched its UNIKRN esports betting and skill-based wagering branch, with soft launches in Brazil and Canada, and further launches planned for the year.

The company labeled as “successful” the performance of the BetMGM joint venture, which recently extended its geographic footprint in the US to Maryland, Ohio and Massachusetts. Fiscal year 2022 NGR for the brand was at $1.4 billion, up 71% year on year, beating prior expectations. Long-term objectives of a 20-25% market share and a 30-35% EBITDA margin remain unchanged.

In a recent BetMGM-specific trading update, Entain and MGM Resorts stated they now expect the platform to turn profitable in the second half of 2023 and to deliver net revenue from operations of between $1.8 billion and $2 billion in FY 2023. In support of the brand’s strong performance, the partners have committed to invest a combined additional $150 million this year, bringing total investments to build the company in less than 5 years to about $1.25 billion.

However, that capital injection might be the last. On Wednesday, following the trading update, Entain said it would end the financial support of the brand once that business turns profitable. "Assuming no major changes to our environment and markets, we expect financial support for BetMGM to come to an end as we move to profitability in the U.S.," Jette Nygaard-Andersen told analysts, as reported by Reuters.