BUSINESS

Net Entertainment expansion strategy pays off as Q1 profit jumps 60.9%

TAGs: Net Entertainment, netent

net-entertainment-record-profitsOnline gambling software outfit Net Entertainment set new revenue and profit records in Q1 as the company reaped the benefits of its expansion strategy.

Revenue in the three months ending March 31 rose 37.1% to SEK 258.3m (US $30.9m) while operating profit jumped 59.8% to SEK 81.8m and profit after tax soared 60.9% to SEK 74.2m. Operating margin improved 4.5 points to 31.7%. Net Ent CEO Per Eriksson credited 2015’s strong start to the company’s “innovative gaming solutions as well as our strong expansion on new and existing markets.”

Net Ent says it handled 6.5b game transactions in Q1, up 30.8% from the same period last year. Mobile gaming nearly doubled to 20.6% of total game win. Net Ent says that as of Q2, all its new games for both desktop and mobile have been developed in HTML5, which will help realize synergies going forward.

The quarter brought 11 new customer agreements – including Denmark’s Danske Spil, Spain’s Codere and the UK’s Gamesys – and the launch of seven new customers’ casinos, most notably Full Tilt. The company has also gone live with Bwin.party since the quarter ended.

Looking forward, Net Ent is hopeful of receiving a Spanish operating license now that the country has given operators the greenlight to add slots to their online mix. Net Ent is equally hopeful that it will be licensed to operate in New Jersey’s regulated online gambling market by H2 2015. On the downside, Net Ent warned that Italian authorities’ efforts to purge operators not holding a local license could negatively impact Net Ent’s revenues in the short term.

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