For Super Group, the United States is currently sort of a buzzkill. Company officials say that excluding the results of their operations in the US over the second quarter of this year, Super Group saw record revenues and a healthy profit margin.
However, the US operations are still part of the company. Super Group says it plans to eventually bring its business in the US onto the level of its operations elsewhere. Recent events reveal part of that plan.
Super Group shares Q2 2023 financials
According to an Aug. 17 press release from Super Group, global revenues for the company came to €380.8 million (about USD 411.4 million) for the second quarter of this year. That is an increase of 19% compared to the second quarter of 2022.
Profit, however, was down a stark 90.8% in the same annual comparison. The release lists several reasons for the massive disparity:
- Q2 2022 profit “included the positive impact of non-cash adjustments of €283.3 million related to the business combination and SGHC’s public listing on Jan. 27, 2022
- A non-cash charge of €6.1 million related to the increase in fair value of a liability for a call option granted to a third party to purchase the B2B division of Digital Gaming Corporation Limited
In plainer language, the second quarter of last year saw a cash infusion of superb scale due to the company becoming publicly listed. Furthermore, the second quarter of this year included a one-time expense related to the acquisition of the Digital Gaming Corporation.
Commentary from Super Group executives makes the situation more clear. Super Group CFO Alinda van Wyk stated that:
“Our second quarter results, ex-US included record revenue and solid Operational EBITDA of €82.6 million. Our monthly active customer numbers continue to show momentum reaching 3.7 million which we believe is a key driver for future growth.
Achieving scale in each of our markets, combined with driving cost efficiencies throughout the business remain our focus for long-term growth and bringing us back to consistent ex-US EBITDA margin from operations of greater than 20%. With regards to the US, the business is tracking in-line with expectations and we are confident in our strategy.”
Expansion and spending seem to be at the core of that US strategy right now.
Spending money to make money in the US
Super Group is still feeling the effects of the January acquisition of the Digital Gaming Corporation (DGC) in its financials. Since that takeover, DGC has been working to expand its operations. For example, DGC inked a deal to get its content onto Caesars casino products in New Jersey in May.
Furthermore, Super Group just spent a cool $20 million on a sports betting license for its Betway brand in Illinois. When active there, that will bring the number of US states that Betway offers online sports betting in to 10. Betway also offers real-money online casino play in New Jersey and Pennsylvania.
At this point, there are no further publicly announced US acquisition or expansion plans. At the same time, future events along those lines should not surprise anyone. This is the second consecutive quarter that has seen heavy investment in US operations from Super Group.
That spending might not yet be paying off for Super Group but the company has communicated confidence that it will. Clearing the way for Betway in the US is currently expensive. Super Group believes it will pay off in the long run, though.