888 beats Q1 revenue expectations despite 3% YoY dip
Bosses suggest business will return to growth in Q2 as monthly active customers increase and value creation plan kicks into gear
888 has reported £431m in revenue for Q1 2024, above previous expectations, but a 3% year-on-year (YoY) decline compared to Q1 2023.
The London-listed operator did note revenue was up 2% compared to Q4 2023, which it said represented “a continuation of positive sequential quarter-on-quarter trends”.
The firm edged above its previously provided revenue guidance of £420m to £430m, with management noting they anticipate revenue to return to YoY growth from Q2 onwards.
Bosses added that full-year 2024 revenue is expected to be consistent with their mid-term target of between 5% and 9% annual growth.
888’s share price is up 3.1% at the time of writing to 82.27p.
Breaking group revenue down by vertical, sports betting showed a 10% decline from £175.7m in Q1 2023 to £159m in the reporting period as stakes dipped by 5%. Margin fell 0.5 percentage points to 11.8% YoY.
On the gaming front, revenue remained flat with a 1% uptick to £272.2m while total group average monthly actives increased by 6% to 1.8 million.
Geographically, the UK and Ireland online arm saw total revenue slip by 1% to £164.4m despite a 4% increase in gaming revenue to £101.9m.
This was offset by an 8% decline in sports betting revenue to £62.5m on the back of a 9% dip in stakes to £630.6m.
However, 888 did note a 9% increase in actives to 1.3 million. The company said the region is expected to return to growth next quarter and will be driven by “strong customer engagement, new product launches and the annualization of safer gambling changes”.
The international division also saw revenue dip with a 2% fall to £136.5m, which was mainly driven by a 22% slump in sports betting revenue to £20.5m. Gaming revenue ticked up slightly by 2% to £116m.
888 did say the international segment returned to growth in February and March at 4%, driven by Spain, Italy and Denmark.
The publication of the group’s Q1 results comes hot on the heels of the firm’s new value creation plan, announced last month.
The plan, which also includes rebranding the business to evoke, has already seen the disposal of 888’s US B2C business to Hard Rock Digital.
The operator is looking to improve adjusted EBITDA margin by around 100 basis points per year, as well as deleveraging to reach a net debt ratio of 3.5x or below by the end of 2026.
Additionally, £30m of operating costs are expected to be saved this year, which will then be reinvested into “more profitable marketing to drive growth”.
Per Widerström, 888 CEO, said: “I am pleased to report that Q1 2024 revenue was slightly ahead of our guidance, with strong player volumes converting into improved revenue run rates.
“Having lapped various regulatory and compliance changes during the quarter, and with increased marketing investment supported by an exciting product pipeline, we remain confident in a return to growth from Q2 2024.
“I was delighted to outline our multi-year value creation plan alongside our full-year results in March, and am pleased to report a strong quarter of progress against these plans.
“We are moving decisively and at pace to position our company for long-term success, and I look forward to providing further updates about our progress in the coming months,” he added.