Betsson share prices have fallen almost 15% since its Q2 earnings were released on Thursday, despite revenue increasing.
Revenue figures rose by 12% but stagnation in core Nordic markets and rising taxes contributed to the lack of faith from investors, causing a sell-off. Stock prices fell sharply from SEK 198.8 on Thursday to SEK 164.8 on Friday.
The sell-off came despite a revenue increase to €303.7 million, up from €271.5 million in Q2 last year. Split by segment, sports betting revenue grew 15%, with revenue generated from Betsson’s online casino up 11%.
EBITDA increased 8% to €84.1 million, but the company’s EBITDA margin fell to 27.7%, down from 28.6% in Q2 2024. Operating cash flow also dropped, down from €75.8 million to €41.1 million, which may have concerned investors.
Other causes for concern were a further decline in the Nordic markets for the Swedish-based company. Q2 revenue dropped 28.4% year-on-year to €33.9 million, and the company’s overall active number of users also fell, down to 1.38 million from over 1.4 million.
Company In Strong Position, Says CEO
Betsson CEO Pontus Lindwall said he would not sell his shares based on the Q2 results.
“It’s a strong report — actually our second-best quarter ever, only behind last year’s record-breaking Q4,” Lindwall said. “From a performance perspective, the numbers speak for themselves.”
He attributed the stock price drop to investors cashing in on a series of good results, rather than worrying numbers.
“Our shares have performed very well — with around 40% growth over the past 12 months,” Lindwall stated.
“That’s been a sustained run, and perhaps some investors chose this moment to cash in their gains. Personally, I wouldn’t sell my shares based on this quarter — it’s a strong position for the company overall.”
Betsson Grows In Latin America, Exits Nigeria
In an official statement accompanying the Q2 earnings release, Lindwall attributed the revenue rise to a strong performance in Latin America.
He wrote, “The increase was mainly driven by continued strong growth in Latin America, where revenue increased by 35 percent and reached new record levels, with Peru and Argentina as the main drivers.”
Revenue climbed 35.4% to an all-time high of €84.7 million in the region. Newly regulated markets, such as in Brazil, present new opportunities, but also lead to more taxes.
Lindwall notes, “We hope to be even stronger in regulated markets in the future. That will come with some more tax, but on the other hand, we hope to be able to grow our business a lot more, and that will mitigate.”
Operations were discontinued in Nigeria with the company reviewing its strategy in Africa. The company has also pulled out of its proposed acquisition of Holland Gaming Technology Ltd and Holland Power Gaming B.V. in the Netherlands.
Figures in Western Europe were also strong, with a 35.6% increase in revenue to €59.3 million, driven by casino growth and record results in Italy.
Company Hit With Fines In Sweden
The decline in revenue in Nordic markets also came as Betsson faced increased regulatory scrutiny. In June, the Swedish Gambling Authority (SGA) hit Betsson Nordic with a SEK6.5m (€577,218) penalty for shortcomings in customer due diligence.
Additionally, this month, a Swedish Supreme Court ordered subsidiary BML Group to pay around €500,000 to a user in Sweden over accusations it encouraged his problem gambling.
Lindwall commented on the ruling, stating, “We are of course disappointed with the Supreme Court’s decision in this individual case.”
“At the same time, we note that these are very specific circumstances and that the judgment is not expected to have any broader financial consequences for our operations.”
