Super Group Confirms $2B Revenue Forecast for 2025 Amid Market Expansion Surge

Insights from Earnings Call: Super Group (SGHC) First Quarter 2025

Management View

• CEO Neal Menashe announced a robust start to 2025, highlighting record total revenue of $517 million, a 25% year-over-year increase, and adjusted EBITDA of $111 million, which rose 120% year-over-year. The company set new records for monthly active customers and total sports wagering.
• The firm highlighted its key strategy on improving worldwide processes, advancing technological capabilities, and keeping a controlled marketing expenditure at 26% of total income.
• Super Group announced it will now report financials in U.S. dollars to align with its U.S. peers and improve investor comparability.
• Chief Financial Officer Alinda Van Wyk announced robust free cash flow, noting $351 million in unencumbered funds and zero debt. She also emphasized ongoing benefits for shareholders via a guaranteed minimum quarterly dividend of $0.04 per share.
• The firm showed appreciation to ex-President and Chief Commercial Officer Richard Hasson for his efforts spanning 13 years.

Outlook

• Super Group restated its financial forecast for fiscal year 2025, projecting total revenues above $2 billion along with an adjusted EBITDA surpassing $421 million. While the leadership has chosen not to revise this guidance on a quarterly basis, they acknowledged that potential market prospects might lead to additional expansion.
• The firm anticipates reaching break-even point for its American online gaming activities by 2027, bolstered by the recent introduction of Spin Palace Casino into New Jersey and Pennsylvania markets.

Financial Results

• Revenue outside the U.S. hit a high of $502 million, marking a 24% increase from the previous year, whereas adjusted EBITDA outside the U.S. climbed 62% to reach $121 million, giving a margin of 24%.
• The African division experienced a 54% rise compared to the previous year, fueled by impressive showings in South Africa and Ghana, along with a successful debut in Botswana. In Europe, revenue climbed by 53%, bolstered significantly by the UK’s 87% surge, thanks to well-performing brands such as Jackpot City and Betway.
• Canada experienced a 13% increase compared to the previous year, showing strong gains in Ontario and various other regions. However, APAC revenues decreased as a result of unfavorable exchange rates and business shutdowns.
• The U.S. company reduced its EBITDA loss to $10 million in the first quarter of 2025 from $11 million in the fourth quarter of 2024, indicating advancement towards its operational objectives.

Q&A

• Jed Kelly, Oppenheimer: Raised concerns about the firm’s approach in the U.S. market and the possible legalization in Alberta. The CEO, Menashe, highlighted improvements in products and marketing effectiveness, anticipating that Alberta will have regulations in place by 2026.
• Jason Tilchen from Canaccord Genuity queried about Africa’s growth prospects and Nigeria’s competitive environment. In response, Menashe emphasized significant progress in South Africa, Ghana, and Botswana, mentioning upcoming efforts focused on tailoring product enhancements specifically for Nigeria.
• Bernie McTernan from Needham asked about Africa’s contribution to worldwide earnings. Menashe affirmed that Africa has significant additional profit margins and emphasized their concentration on lucrative market segments.
• Mike Hickey from The Benchmark Company sought clarification regarding market share and competitive landscape in Africa. Menashe highlighted robust standings in South Africa and Ghana, emphasizing improvements in operational efficiency and expansion of current activities.

Sentiment Analysis

• Experts expressed both hopefulness and doubt, concentrating on the U.S. performance and facing regulatory hurdles.
• The management expressed assurance through their planned statements, highlighting operational effectiveness and targeted market strategies. During the question-and-answer session, Menashe provided cautious answers, specifically addressing regulatory effects and competitive landscapes.
• In comparison to the prior quarter, management kept up a similarly confident demeanor; however, analysts focused more intently on U.S. strategies and risks specific to various markets.

Quarter-over-Quarter Comparison

• The revenue saw an increase starting from Q4 2024, thanks largely to enhanced performance in Africa, Europe, and Canada. The adjusted EBITDA margin outside of the U.S. rose to 24%, up from 23% in the prior quarter.
• The guidance language stayed unchanged, emphasizing sustainable development and careful market investments.
• Experts moved their attention from broad strategies to thorough questions regarding particular markets such as the one in the U.S. and also Africa.

Risks and Concerns

• The management recognized regulatory challenges in New Jersey and various other regions, highlighting their focus on reducing costs and sustaining profit levels.
• Fluctuations in currency along with possible regulatory shifts specific to markets within APAC and Europe were pointed out as potential hurdles.
• Experts expressed worries over increased rivalry both in Africa and the United States, along with the effects of escalating taxes in crucial regions.

Final Takeaway

In the first quarter of 2025, Super Group achieved an unprecedented financial performance, thanks to impressive showings in major markets and efficient expense control. Boasting substantial liquidity with zero debt, the firm restated its forecast of reaching $2 billion in revenues for the year despite dealing with hurdles posed by regulatory changes and intense competition. Management’s emphasis on optimizing market operations and upgrading technological capabilities sets them up favorably for consistent expansion ahead.

Review the complete earnings call transcript here.