BUSINESS

NYX doubles revenue but acquisitions and Ongame suckiness create $6.5m loss

TAGs: 888 Holdings, myBet, nyx gaming group, Ongame, Paddy Power

nyx-gaming-group-revenueOnline gambling technology supplier NYX Gaming Group more than doubled its revenue in the third quarter of 2015 but its net loss rose nine-fold due to acquisition expenses and continued underperformance by its Ongame online poker network.

NYX reported revenue of $13.3m in the three months ending Sept. 30, a 111.6% year-on-year improvement. Excluding recent acquisitions, NYX said organic revenue growth was up 63.5% to $10.3m. But adjusted earnings fell 166% to -$1.4m and NYX reported a net loss of $6.5m compared to an $812k profit in the same period last year.

The company laid part of the blame for the red ink at the door of its Ongame poker business, which recorded a net loss of $2.5m in Q3. NYX acquired Ongame from Canada’s Amaya Gaming last November and the business, which was already in decline at the time, has continued to struggle. On the plus side, Ongame’s Q3 losses were $800k less than it reported in Q2.

Blame was also assigned to NYX’s other recent add-ons – including Amaya’s B2B software division, Belgrade-based technology outfit eGaming Consulting and a buyout of its former joint venture partner in SNG Interactive – which helped push NYX’s Q3 acquisition and restructuring expenses to $6.6m.

NYX ensured further short-term financial pain via last week’s acquisition of Montreal-based development studio Side City Studios, which produces content for both online and land-based casinos. NYX financed the deal via the issue of 333k ordinary shares and a maximum cash payment of C$4m, the actual total of which will be based on Side City meeting certain performance benchmarks in 2016 and 2017.

Focusing on the positive, NYX CEO Matt Davey celebrated “another record breaking quarter” in which NYX took “an important step in our multi-year plan to gain scale and relevance as a diversified high growth content and technology supplier.”

NYX’s Open Gaming System (OGS) added eight new client sites during Q3 and the signing frenzy has continued into Q4. On Tuesday, NYX announced it had signed on to provide a variety of online and mobile casino content for the casino and bingo sites of UK-listed online gambling operator 888 Holdings, including the latter’s Dragonfish B2B platform.

That news followed Monday’s announcement that NYX had signed a letter of intent to deploy a host of digital gaming content to Irish betting operator Paddy Power. The parties expect to execute their agreement before the end of the year, with NYX content appearing on Paddy sites in 2016.

That news followed last week’s announcement that NYX had inked a “long-term” deal to expand the online casino platform of German gaming operator Mybet, whose CEO Zeno Oskko said the deal would double the number of casino games the site currently offers.

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