Super Group Reports Q4 Results, Provides Guidance

Super Group (NYSE:SGHC) reported its Q4 results on Tuesday, with revenue of €329.1 million and full-year revenue of €1.29 billion, exceeding the high end of the guidance range.

The company guided for 2023 core-Revenue/EBITDA (non-US) to 4%/7% year-over-year (8%/9% ahead of Street estimate), implying Canada returning to year-over-year growth, a stable regulatory environment, and higher OPEX/Marketing leverage.

Guidance implies gross margins decline of 270bps on higher taxes in Ontario. Additionally, management expects to invest $70 million in US operations following the DGC acquisition, with a similar level in 2024.

Analysts at Oppenheimer expect investors to question the US market strategy given that market share continues to be consolidated among the top-two players, however, management was a decade behind in the UK and is now holding up a profitable business in that market.

Super Group (NYSE:SGHC) reported better-than-expected Q3 results, with revenue up 2% year-over-year. Monthly Average customers grew 7% year-over-year to 2.7 million, excluding customers of Jumpman Gaming which was acquired on September 1.

Despite the beat, management left 2022 guidance unchanged, implying Q4 revenue in the range of €187–317 million and EBITDA in the range of €37–52 million.

The analysts believe the wide range suggests a high degree of conservatism over holds around the FIFA and Cricket World Cups. The DGC acquisition will close in early January, and the analysts will update their estimates accordingly. Management plans to break out DGC separately given the EBITDA drag from operating in the hyper-growth US market. The analysts see Canada returning to growth in H2/23 but remain on the sidelines until financial visibility improves.

Analysts at Oppenheimer downgraded Super Group Limited (NYSE:SGHC) to perform from outperform and removed their previous $8 price target following the company’s reported Q2 results last week.

The analysts highlighted the company’s reiterated full-year guidance, which came well-below Street estimates on Macro, Europe regulatory headwinds, and Canada's legal transition.

Q2 revenue dropped 10% year-over-year to €320.8 million, 12% below the Street estimate, as a result of online casino net gaming revenue and brand license fee income decline, partially offset by a revenue increase in sports betting net gaming. Q2 monthly average customers grew 3% year-over-year to 2.7 million.

Analysts at Oppenheimer downgraded Super Group Limited (NYSE:SGHC) to perform from outperform and removed their previous $8 price target following the company’s reported Q2 results last week.

The analysts highlighted the company’s reiterated full-year guidance, which came well-below Street estimates on Macro, Europe regulatory headwinds, and Canada's legal transition.

Q2 revenue dropped 10% year-over-year to €320.8 million, 12% below the Street estimate, as a result of online casino net gaming revenue and brand license fee income decline, partially offset by a revenue increase in sports betting net gaming. Q2 monthly average customers grew 3% year-over-year to 2.7 million.