Super Group Q1 2025 Earnings Report

Super Group EPS Results

• Actual EPS: $0.12
• Consensus EPS: $0.09
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: N/A

Super Group Revenue Results

• Actual Revenue: $495.96 million
• Expected Revenue: $423.91 million
• Beat/Miss: Beat by +$72.05 million
• YoY Revenue Growth: N/A

Super Group Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: After Market Closes
• Conference Call Date: Friday, May 9, 2025
• Conference Call Time: 7:45AM ET

Super Group (NYSE:SGHC) (SGHC) Limited operates as an online sports betting and gaming operator. It offers Betway, an online sports betting brand; and Spin, a multi-brand online casino offering. Super Group (SGHC) Limited is based in Saint Peter Port, Guernsey.

Super Group Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Hello, everyone, and thank you for joining the Super Group First Quarter twenty twenty five Earnings Webcast and Conference Call. My name is Lucy, and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. I will now hand over to your host, Inkem Ojibow, Head of Investor Relations to begin. Please go ahead.

[Nkem Ojougboh, Head of IR at Super Group]

Good morning, everyone, and thank you for joining us today to discuss Super Group's results for the first quarter twenty twenty five. During this call, Super Group may make comments of a forward looking nature that are subject to risks, uncertainties and other factors discussed further in its SEC filings that could cause the actual results to differ materially from historical results or from the company's forecast. Group assumes no responsibility to update forward looking statements other than as required by law. On today's call, Supergroup may refer to certain non GAAP financial measures. These non GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP.

[Nkem Ojougboh, Head of IR at Super Group]

Supergroup has provided a reconciliation of the non GAAP financial measures to the most comparable GAAP figures in the press release issued yesterday and available on the Investor Relations page of the Supergroup's website. In addition, Super Group has reported its financial results and metrics in two parts. Highlighting Super Group's profitable and cash generative global business separately from its investment into The US. This aligns with annual guidance that Super Group has provided for 2025. Going forward, Super Group will report on the combined results.

[Nkem Ojougboh, Head of IR at Super Group]

Super Group recommends that investors refer to the supplementary presentation posted to the website. Today, I'm joined by Neil Menashi, Chief Executive Officer and Alinda Van Vijk, Chief Financial Officer. After her prepared remarks, we will open the call up for questions. And now I'd like to turn the call over to Neil.

[Neal Menashe, CEO & Board of Director at Super Group]

Thank you, Inc. Good morning, everyone, and welcome to Super Group's first quarter twenty twenty five earnings call. We kicked off 2025 with a powerful quarter, delivering impressive growth in revenue and customer numbers. We remain strategically focused on making smart adjustments to our global operations, cultivating our growth areas, enhancing our technology and product offerings and spending wisely on operations and marketing, all while continuing to deliver meaningful shareholder returns. Before we dig into our numbers, we have four important announcements.

[Neal Menashe, CEO & Board of Director at Super Group]

First, please join me in expressing our deepest thanks and gratitude to Richard Hassett, former President and CCO, for everything that he has done for Super Group over the last thirteen years. It has been a super journey. We wish him every success in his next chapter. Second, from today going forward, we will be reporting our financial results in U. S.

[Neal Menashe, CEO & Board of Director at Super Group]

Dollars. To enhance comparability with our U. S. Listed peers and provide more relevant information to investors. Third, also from today going forward, our results presentation will be inclusive of our U.

[Neal Menashe, CEO & Board of Director at Super Group]

S. Business unless stated. Finally, we are excited to reintroduce Super Group to you at our upcoming Investor Day on Thursday, 09/18/2025 in London, and we are eager to present our new Office Hub. This event will reflect the significant transformation that we have made since Supergoop listed over three years ago. Turning now to our numbers.

[Neal Menashe, CEO & Board of Director at Super Group]

We comfortably beat our internal ex U. S. And U. S. Expectations for both total revenue and adjusted EBITDA for quarter one twenty twenty five.

[Neal Menashe, CEO & Board of Director at Super Group]

The combined group delivered an all time high first quarter total revenue of $517,000,000 growing 25% year over year. Total combined group adjusted EBITDA, also first quarter record, increased by 120% year over year to $111,000,000 with a combined margin of approximately 22%. We delivered all of this without compromising our strategy of reinvesting for growth with a marketing ratio of 26% of net revenue. Growth was fueled by exceptional wages for both sports betting, up 7% year over year and casino, up 23% year over year. Total revenue ex The U.

[Neal Menashe, CEO & Board of Director at Super Group]

S. Was the highest first quarter ever, growing 24% year over year to $5.00 $2,000,000 Adjusted EBITDA ex The U. S. Grew 62% to $121,000,000 with a margin of 24%. Analyzing the ex U.

[Neal Menashe, CEO & Board of Director at Super Group]

S. Numbers, key drivers were as follows: African grew 54% year over year, driven by steady development in South Africa, Ghana, Malawi and the recent launch of Botswana. Botswana is off to the races as one of the most successful launches we have ever seen, while Nigeria is receiving strategic attention that we believe will be fruitful. In Africa, Casino and Sports were up 3138% year over year respectively, thanks to continued growth in our customer base and the strength of our market leading global brands. The end result is that we continue to occupy podium positions in multiple markets across the continent.

[Neal Menashe, CEO & Board of Director at Super Group]

Europe was up 53% year over year. The UK continued to be a bright spot with revenue up 87%, thanks to strong growth from Jackpot City and Betway together with improved marketing and product experience. Spain is up 20% over the same period due to growth in casino as well as the relaxation of the royal decree around sponsorship and marketing. Overall, Canada grew 13% year over year, Ontario grew 2%, while the rest of Canada grew 16% over the same period. Our performance highlights the continued strength of our brands across Canada, where profitability remains very good.

[Neal Menashe, CEO & Board of Director at Super Group]

We maintain tight control of overheads and are holding marketing spend stable as a percentage of revenue. In Albursav, we are preparing for potential launch of local regulations in 2026. Lastly, APAC was significantly affected by currency weakness and the closure of non performing markets, ending down 13% year over year. Our largest market in APAC is New Zealand, which was in line with last year in constant currency, but down 7% year over year in dollar terms. Growth in New Zealand is constrained by regulatory limits on marketing, but we believe that we have plans in place to address this in order to return New Zealand to growth.

[Neal Menashe, CEO & Board of Director at Super Group]

At the EBITDA level, this quarter clearly shows how the operating leverage inherent within our business fuels scalable and profitable growth. As our established markets reach scale, a substantial portion of every incremental dollar of revenue converts to super profit at our bottom line. By aggressively reinvesting our existing footprint and maintaining a disciplined cost structure, we are driving sustainable margin expansion, and we expect this trend to continue. In The U. S, our iGaming business is progressing according to plan.

[Neal Menashe, CEO & Board of Director at Super Group]

First quarter twenty twenty five picked up from fourth quarter twenty twenty four, with EBITDA improving to a $10,000,000 loss in quarter one twenty twenty five from an $11,000,000 loss in quarter four twenty twenty four. In March 2025, we introduced Spin Palace Casino in New Jersey and Pennsylvania, replacing our sports focused brand Betway. We are monitoring what a proposed tax asset in New Jersey could mean for profitability, but we are currently satisfied with the progress of The U. S. Business.

[Neal Menashe, CEO & Board of Director at Super Group]

We are meeting our KPI goals and remain on track for expected breakeven in 2027. We are really pleased with the new record we set this quarter, including a new high for unique monthly active customers, which averaged 5,400,000 for the quarter and a new record for total sports wagering ex India, which reached $899,000,000 for the quarter, up 7% year over year, even while gross margin in the sports book improved from 11.1% in quarter one twenty twenty four to 13.8% in quarter one twenty twenty five. Our balance sheet remains stellar as we finished this quarter with unrestricted cash of $351,000,000 and no debt. In February, you'll recall that we increased our minimum quarterly dividend target to $04 per share, which resulted in $20,000,000 being declared and paid to our shareholders at the March 2025. In the last twelve months, we have returned $146,000,000 to our shareholders.

[Neal Menashe, CEO & Board of Director at Super Group]

This highlights our very strong free cash flow profile. Turning to guidance. On 02/21/2025, we guided to fiscal year group revenue of greater than €1,915,000,000 and group adjusted EBITDA of greater than €400,000,000 In dollar terms, converted at the average rate for the first quarter of twenty twenty five of 1.052, that's equivalent to a combined total revenue of greater than $2,000,000,000 and adjusted EBITDA of greater than $421,000,000 So today, we are maintaining our guidance. Super Group does not update guidance on a quarterly basis, but we do continuously assess performance as the year progresses. So not factored into our guidance, we continue to see opportunities and potential for further growth in markets, both inside and outside of our current footprint.

[Neal Menashe, CEO & Board of Director at Super Group]

In closing, April was another super month across the board in Africa, Canada, Europe, APAC and The U. S. The second quarter is therefore off to a great start. We are growing consistently with an iron opportunity and the technology to support, retain and attract customers around the world. We are excited about the year ahead.

[Neal Menashe, CEO & Board of Director at Super Group]

I will now turn the call over to the operator to open the call up for questions. Operator?

[Operator]

Thank you. Our first question is from Jed Kelly of Oppenheimer. Jed, your line is now open. Please go ahead.

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

Hey, great. Thanks for taking my question. And nice job on the quarter. Just just just looking at sports and and looking at the presentation, it looks like your your handle ex The US was was up 14%. So can you just expound, like, what what's working there?

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

And then just circling back to The US, seeing a lot of good revenue growth. Or you are seeing some of the, like, you know, some of the products with land based presidents start to increase their share as well in states like New Jersey. Can you just talk about how you're thinking about, you know, The US competitively given that, you know, you're competing with some some, you know, some more well known brands and, products with land based partnership? Thanks.

[Neal Menashe, CEO & Board of Director at Super Group]

Okay. Simply sports is obviously sports is all about the product as well. We've had huge product development across the world. And as we deploy this in, we get more engagement with our customers. And of course, we've got this huge marketing budget that as we make that more effective, you get more people into the funnel.

[Neal Menashe, CEO & Board of Director at Super Group]

So I think that's all a process of keeping the customers engaged. And then of course, as you know, 80% of our business is actually casino, right, even from the sports customers mixed up with the Betway ones with the spin. So we're seeing good traction there. When it comes to The U. S, again, our stuff is we only do casino.

[Neal Menashe, CEO & Board of Director at Super Group]

And we compete with land based casinos all over the world. And what we are doing, we are enhancing the product offering there. As you know, we launched with Spin Palace Casino, which took over from Ambitway. So now we've got Jackpot City and Spin Palace Casino in New Jersey and Pennsylvania, and we've got more enhancements coming, and we've got good marketing. And then what we have to do is remember for us to breakeven is a much lesser amount as time goes on.

[Neal Menashe, CEO & Board of Director at Super Group]

So so we are getting closer to what we believe is our net revenue that we can then our operating leverage can then kick in after that. But it's all about the product, it's all about the marketing, it's all about the efficiencies, and that's what we're all about.

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

Okay. Great. And then just my follow-up. Just on Alberta potentially going legal at the beginning of next year. Can you sort of talk about how you're going to approach that market and some of the strategies you might have learned from the Ontario launch?

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

Thanks.

[Neal Menashe, CEO & Board of Director at Super Group]

Yes. So Alberta according to us, it might only be the latter half of twenty twenty six just based on where the regulation is currently. But we learned how we migrate our customers' databases from Ontario, and we've learned what what maybe we didn't do correctly then, and we will never make the same mistake twice. And that's that's that's that's how how we've always done. So so we wait for it.

[Neal Menashe, CEO & Board of Director at Super Group]

The products The products being built ready. We wait for all the rigs and we know exactly what we need to do there.

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

Thank you and good

[Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.]

quarter.

[Neal Menashe, Chief Executive Officer at Super Group]

Thanks.

[Operator]

The next question comes from Jason Tilchin of Canaccord Genuity. Jason, your line is now open. Please go ahead.

[Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc]

Thanks. Good morning and thanks for taking the question. Africa has been a really key growth driver for the company over the past year or two. I'm just wondering if you could talk a little bit high level first, how much growth you still think is in the existing markets that you've been operating in for some time versus sort of growth is going to come from some of the newer markets that you're planning on entering going forward? And can you talk a little bit specifically around the competitive landscape in Nigeria, how that's different from other markets?

[Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc]

Talked about strategic attention being put there. What sort of that entails going forward? Thanks.

[Neal Menashe, CEO & Board of Director at Super Group]

So I think obviously Africa has been a great continent for us, but remember it's made up of lots of countries. Every country we're in, it's all about the product, the offering, the banking, the marketing. And as we keep on tweaking all of those is we are seeing good uplift. And remember, we've also launched our Jackpot City Casino in some of the markets. We haven't even gone into all of them yet.

[Neal Menashe, CEO & Board of Director at Super Group]

So for us, it's and it's been understanding that Botswana is a new market and we're going there, the product's really good and it really got off to a flying start. And as the new listen, are lots of other markets in our pipeline, but we have to make sure the taxes are right, the banking is right in order for it to be operationally profitable for us. But we see huge potential. The content is massive. It's a growing population of customers turning 18 and 21 every year, the few percentage new customers coming on board and our brands are resonating there too with all our global marketing spend and in the localize.

[Neal Menashe, CEO & Board of Director at Super Group]

Nigeria is a bit more complicated. I think for us there is the product is not up to scratch. We have to fix some of them, make it more localized, which we're on. We've seen unbelievable traction in South Africa, Ghana, Tanzania, etcetera, with localizing the product. But again, there's always these tweaks.

[Neal Menashe, CEO & Board of Director at Super Group]

And so for us, it's just the beginning. It's as these product offerings come, as we can develop them and deploy them in the markets one by one. So we've got a lot a big pipeline of new countries to come, but we're only going to bring them on as we know that all the stuff all the metrics make sense in that market for us.

[Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc]

Okay. Very helpful. And I guess a quick follow-up there. You mentioned Jackpot City in the context of Africa. You've also been seeing really strong performance in New Jersey relative to the Betway brand since you launched there.

[Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc]

I'm just wondering if you

[Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc]

could share a

[Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc]

little bit more about what differentiates Jackpot City and why you've seen such strong results with that brand and how that's resonating.

[Neal Menashe, CEO & Board of Director at Super Group]

Okay. So remember, our thesis has always been a customer who who who bets on Betway and then goes and sports and then plays casino is is is a different customer to someone who's only looking for pure play casino. At pure play casino, we've we've got a lot of them, but Jackpot City is the the the biggest one. I think the brand, everything to do with it resonates. It's been in Canada a long time, so we bought all over.

[Neal Menashe, CEO & Board of Director at Super Group]

We bought it to The UK. So we are seeing great traction. Again, that's the branding of the worldwide branding also helping. So that is a totally different customer base, and then we'll open new ones. As we've got Spin Palace, Casino, other ones, etcetera.

[Neal Menashe, CEO & Board of Director at Super Group]

So that's always been our strategy. I have to remind people that's where we started this business. Started with Jetport City, Spin Palace, and we're now just bringing that to more countries.

[Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc]

Great. Thank you very much.

[Operator]

The next question comes from Clark Lambton of BTIG. Clark, your line is now open. Please go ahead.

[Clark Lampen, Managing Director at BTIG]

Thanks very much. I got a couple, here. I'll start on Africa. Neil, I wanted to see if, you could help us frame performance sort of between your countries. Very impressive, 54% growth.

[Clark Lampen, Managing Director at BTIG]

Was performance, disproportionately levered to one specific territory? And then as we're thinking about expansion in Africa over the balance of the year, I'm curious, I guess, you talked about, banking payment processing product. Are the sort of basic ingredients for success across markets and with new markets in particular sort of consistent such that you're hitting the ground running and ramping in new territory faster than you did in the past and will do so again in the future? Or is each territory so distinct and different that we shouldn't necessarily draw a line between Botswana performance and maybe what you might be able to achieve with the next launch?

[Neal Menashe, CEO & Board of Director at Super Group]

Okay. So firstly, we don't break it down by country, but our podium positions, as you can see on our presentation, South Africa, Ghana, etcetera, we are seeing good growth in all of those. All of our markets, actually even including Nigeria, are all profitable, right? So what's happening really is that extra revenue is really flying down to the bottom line. So what we have to keep doing is keep enhancing the product, keep getting all the new features.

[Neal Menashe, CEO & Board of Director at Super Group]

We've got brilliant features that we roll out, but the tech stack there allows us to be rolled out a feature in, let's say, South Africa or Ghana, we can roll it out in Tanzania, etcetera. So that's helping a lot. When it comes to the banking and the regs, each obviously country is different. Obviously, we big I think we have 150 different integrations of banking products across the whole of Africa. And we're quick to market on the new ones that come out.

[Neal Menashe, CEO & Board of Director at Super Group]

And also, I think the banks and the telcos and everyone want to work with us because the brand is so big and it resonates. Because remember the strategy here. The strategy has been is that soccer is the number one sport, and then you got, obviously, basketball. But we are all over the English Premier League and the the the Spanish League. So they've seen the brand all the time.

[Neal Menashe, CEO & Board of Director at Super Group]

Then we do that individual marketing on the TVs, on on Google where we can do it, etcetera. But that is just resonating. And then and then the customer service, how quickly we pay out the customers, the integrations into the banking systems for fast payments. This is what it's all about, and it's navigating the rates. Right?

[Neal Menashe, CEO & Board of Director at Super Group]

So I think we've really got and I always tell people we've got one team that looks after Africa. So we've broken the world. We've divided and conquered the world, and this is why we're able to do this. So we got a team doing Africa, the team doing the rest of Betway Global as we call it, the team doing spin, and it's been broken down with the various brands. So this is allowing us to get access quickly into these markets and keep enhancing.

[Alinda Van Wyk, CFO & Director at Super Group]

And just to add the Sorry. Clock, I just want to also reference Africa is 13 out of the 20 fastest growing economies in the world at the moment, you know, and the scale also with what the population's growing. So it just gives us that scale for expansion as well. And and with processing and the regulation, it's also a much more friendlier regulation than, for example, The USA. And we've been, for the last fifty years, been dealing with every country's regulation, you know, side by side, and that's been helping a lot with expansion.

[Clark Lampen, Managing Director at BTIG]

Thank you. That's helpful. If I may ask, as a follow-up, a question on, The US iGaming push. I'm curious, if you guys could share a little more detail around the experience in New Jersey and PA so far and whether you might be open to, either launching additional brands in those same states as a means of accentuating the current push? Or if we were to see some expansion, would you prefer to build a presence in additional sort of legal markets in The U.

[Clark Lampen, Managing Director at BTIG]

S? Okay.

[Neal Menashe, CEO & Board of Director at Super Group]

So what we're seeing there is, I think, like, 15,000,000 for the quarter, so $5,000,000 a month. We are getting there. The breakeven obviously in those two states is higher net gaming revenue need when compared to other ones because you've the partner fees along the way with the land base and some other costs. So we're not far off getting to the revenue that we need to be breaking even. So we're seeing good traction.

[Neal Menashe, CEO & Board of Director at Super Group]

What we have to do is we can we still got marketing to spend there. We can buy other things along the way, bolt on acquisitions to help us grow that revenue. So for us, I think it's a much better place to be just for iGaming. Sports is we just couldn't make it work. The one that probably did get away from us is Michigan.

[Neal Menashe, CEO & Board of Director at Super Group]

The only issue we have got in Michigan is that it was very expensive to get a license originally, right? So unless that price comes down, us, the entry cost was too high. But so there's lots we can do. Yes, we could launch one or two more casino brands, but let's see how these two. I think two at the moment is good enough.

[Clark Lampen, Managing Director at BTIG]

Appreciate the color. Thank you.

[Operator]

The next question comes from Bernie McTurnan of Needham. Bernie, your line is now open. Please go ahead.

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

Great. Thanks for taking the question. I wanted to ask a follow-up on Africa. And as I look at you know, slide eight, which shows your your net revenue by geography and how Africa has grown from 37% last first quarter to to 39% this one, how how large do you think it can get, you know, considering the strong growth, growing 54%? How large do you think you can get in terms of your total mix of the global pie?

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

And then I have a follow-up.

[Neal Menashe, CEO & Board of Director at Super Group]

Listen, it's all about the TAMs and stuff. But remember, the secret for Africa is that every bit of extra revenue is super, super, super profitable. So actually, if we grow revenue by 30%, you could almost or 40%, you could almost double your profits there, right? This is the beautiful part of it. So what we have to do is maintain where we are and grow and open and open the new markets.

[Neal Menashe, CEO & Board of Director at Super Group]

So for for us, it's about again, it's not only about the revenue. It's the profitable revenue. And this is what we've learned. That, you know, one thing I think we did wrong in the past, which which we turned around is we were in too many countries. We were in so many countries, and then then then your whole tech stack is is you can't deliver per market.

[Neal Menashe, CEO & Board of Director at Super Group]

So I think we've learned that lesson. We know where we're going. And and, plus, you can see with our guidance, etcetera, is these markets are growing and will continue to grow. And we've got the marketing budget, and that's very important in all my numbers. Remember, we spent 26% of our net gaming revenue on marketing.

[Neal Menashe, CEO & Board of Director at Super Group]

Just so you know, some of our competitors are at 1518%. I can remind everyone that if I if we were, let's say, 20%, we would bought another 50,000,000 to the bottom line for this quarter. But we know we're getting the returns, and that's the secret. So we've got we've got, what I say, petrol in the tank to be able to compete. We've got $450,000,000 a year.

[Neal Menashe, CEO & Board of Director at Super Group]

The question is where are we spending it and how are we spending it and in which countries. And that's what Asund and I have to work with all the CEOs of our various businesses every month understanding are we giving them enough and are they returning.

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

Understood. Just to double check there, so the incremental margins in Africa are higher than your global averages?

[Neal Menashe, CEO & Board of Director at Super Group]

Yeah. Yes. Absolutely.

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

Okay.

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

And then just wanted to ask about, you know, puts and takes on on the guidance for the rest

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

of the year. And just is

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

there anything we you know, whether it's foreign accounts or anything else we need

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

to be thinking about from

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

a comparability perspective just, you know, given the the really strong one q we talked in in the guidance unchanged for the year? Thanks.

[Alinda Van Wyk, CFO & Director at Super Group]

Yeah. Around the guidance, remember, we don't monitor guidance on a quarterly basis. We assess the year as it goes on, and we will give update after quarter two on guidance.

[Neal Menashe, CEO & Board of Director at Super Group]

But I think if you take the seasonality compared to prior years if you just take the seasonality compared to prior years, you know, you can see it, you know, how how how how it is. Like, for example, if you go into quarter two now, is that the football or soccer being our number one sport, all the leagues are finishing now in May, which means June and July, your marketing budgets are less. Know?

[Bernie Mcternan, Senior Research Analyst at Needham & Company]

Yep. Got it. Thank you.

[Operator]

The final question comes from Mike Hickey of The Benchmark Company. Mike, your line is now open. Please go ahead.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Awesome. Thanks. Neil and Inc, congratulations on a great quarter. Thanks for taking our questions. Let me know if you can't hear me.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

I'll I'll switch off the earbuds. They don't work.

[Neal Menashe, CEO & Board of Director at Super Group]

Anyway You're all good. You're good.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Okay.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Thanks, Neil. The obviously, you've got, as you highlighted, great podium positions in key African markets, Neil. Can you sort of quantify your market share and your biggest markets like South Africa? Just trying to figure out how concentrated the revenue is within those top markets for you.

[Neal Menashe, CEO & Board of Director at Super Group]

Yeah. You know, they they I mean, they don't publish, really. I mean, you can get some reports. But, like, I mean, South Africa and Ghana, I mean, South Africa maybe we know, 40% of the market share, whatever the numbers are. But it's it's it's hard to quantify them because they don't report like like The UK or or like like Ontario and and stuff like that.

[Neal Menashe, CEO & Board of Director at Super Group]

But then the corollary of that is, in The UK, we are still small. Even though we got good revenue coming there, there's so much growth there. That's why you're seeing a growth. As we fix the marketing efficiencies and the product, you must understand, as as we drop these little items in each of these markets, we're seeing incremental revenue increase, and that's what we're fighting about. And that's really how by cutting off markets like Portugal, Belgium, France, etcetera, we freed up the pipeline to deliver on the market where we need to be delivering on.

[Neal Menashe, CEO & Board of Director at Super Group]

And I think that's where we're seeing huge, huge upside, and it's profitable upside.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

The right upside to have, Neil, the

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

I guess, obviously, you're on a global business here within Africa. How competitive to the other markets, Neil,

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

is Africa in terms of promotional intensity and pricing perspective? And you're sort of highlighting here, I think, for everyone else how incredible Africa is for an online gaming market. Would you expect more entrants competitively coming into the region this year or next year?

[Neal Menashe, CEO & Board of Director at Super Group]

Listen, I think there's always new entrants coming in all the markets we operate in. But again, in the markets where we've got podium positions, you probably have to think of us like we like what Fanjul and DraftKings are to The U. S, right, especially from the sports side of things, right? And it's bringing the customers. And it's all about the brand resonance, and you've got this customer base that you're building on.

[Neal Menashe, CEO & Board of Director at Super Group]

So every month, every time it's the end of the month and it's payday, etcetera, you're seeing big volumes coming into the system. And we've got the same in Canada, in our positions there, etcetera. So it's working all of those to affect effectively enhance our business. So yes, there's always competition. How do you solve competition?

[Neal Menashe, CEO & Board of Director at Super Group]

Really simple. We become super efficient. That we are on it's not about cost it's not about driving down cost. It's becoming efficient with the cost that you're utilizing, whether whether it's in CRM, whether it's in risk management, whether it's in processing fees. And then the big no one is how do you become efficient on your funnel of marketing.

[Neal Menashe, CEO & Board of Director at Super Group]

If you're open to active or or converting at a certain percentage in each market, how do you make that better? What new products can we do? How do we scale? For example, now if we have to double the business, we don't have to hire double amount of people. That's the key, and it's understanding all these metrics.

[Neal Menashe, CEO & Board of Director at Super Group]

And and and and remember, for twenty five years, we built these businesses on return on marketing. Now we're into the best having the best people in the right seat to deliver us in those markets. And and if they're not delivered and they don't deliver us in the markets, we we have to find the people who will deliver. And that's, I think, been a fundamental change.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Yeah. How do the taxes seems

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

to your African markets? And and how do you see the long term stability of those?

[Alinda Van Wyk, CFO & Director at Super Group]

Yeah. Might be the tax is as we stated, Africa is a very regulated business, and it's always been. We work very closely with the the tax authorities to make sure that they understand the industry and that there's fair tax pull for both from the revenue side and the operator side. It's it's very consistent. We we we've seen once or twice the tax has been increased, but it's always been done within reason for the industry.

[Alinda Van Wyk, CFO & Director at Super Group]

And I think that's been the success. You know, the regulator talks to the revenue authorities and to the operators. And, every country is a tax paying country, and I think, every country is happy to have gaming operators for in income into their into their permits.

[Neal Menashe, CEO & Board of Director at Super Group]

Yeah. Listen. Our big thing across the world is actually the taxes are not not really the one. It's the black market. It's does the regulators where we pay our taxes regulate the black market.

[Neal Menashe, CEO & Board of Director at Super Group]

I mean, the prime example I keep giving is that they think they're collecting great money in Germany, but they're not because all our revenues are down because they allow the black operators to have no tax and have no deposit limits. So that's far worse. You've got to regulate both sides of the coin, and that's what we've been working with all the markets we're in now with with whether you've got the BGC in The UK, in we're even establishing some of those kind of things in other markets because the industry has to you have to explain to the governments what they're doing, right, And how the black market is actually a far bigger risk than anything else because then the customers have got zero protection.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Neil, last question from us.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

I just want to clarify, do you expect,

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

what, I guess, how impactful was Botswana for the quarter? And would you expect sort of number one or sort of top market share in this market after it sort of shakes out here after a couple of quarters? And then curious if you expect any other new markets to open here for you in the medium term within Africa?

[Neal Menashe, CEO & Board of Director at Super Group]

So so Botswana was only launched in February. So it's listen. It's a small country. It's right next to South Africa. So I think the brand awareness has been really good, and I think the product's really good.

[Neal Menashe, CEO & Board of Director at Super Group]

So yes. So so it's been early days in terms of affecting the quarter, right? But I think it's off to a great start, and that's what we need to see. We've got a few other markets, etcetera. We are looking at Ethiopia, Ivory Coast, Angola, etcetera.

[Neal Menashe, CEO & Board of Director at Super Group]

We've got a lot in the pipeline, but we just got to make sure that we can, first of all, deliver all of them correctly and most importantly, that the taxes and the repatriation of the money out of those countries works for us. So we are always on this. We've got other countries we are looking at as well. But we've just got to make sure that it makes profitable sense to do it. So we still got lots of pipeline there.

[Neal Menashe, CEO & Board of Director at Super Group]

And we've not even in most of those countries in North Africa, etcetera, or the West Coast, etcetera. So there's a lot of opportunity everywhere. And a lot of opportunity in Canada, Alberta, all of the incoming rights. So they really are Spain. New Zealand is another interesting one for us.

[Neal Menashe, CEO & Board of Director at Super Group]

Remember, in New Zealand, just to end off, they are looking at regulating. So we are and we have pulled back on some of the marketing that the regulator, they said you shouldn't do on TV. And so that has had a bit of an impact, but we've done it carefully because we will secure we want to secure a license there going forward. That's then again, it should be another market that then is good for expansion as well.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Mean, Neal, when you look

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

at new markets, you've got a great balance sheet here. Do you still think of sort of taking an organic approach to new market entry? Or do you think you're in a better position today given your success and your balance sheet and your cash flow to maybe do some M and A, maybe something

[Neal Menashe, CEO & Board of Director at Super Group]

We agree. I said that for lucky in New Jersey, Pennsylvania. We have the cash flow. We can buy anyone we want. Must be the right price and the right fit, and we are all over this.

[Neal Menashe, CEO & Board of Director at Super Group]

We always are continually looking at stuff, etcetera. Right? So, you know, so I we fully agree, but it's got to be the right fit, and it's got to make sense for for the business. But, yes, we we can definitely buy some some some operators all all over the globe.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Just as a follow-up, Neil, I mean, would you look to do something M and A within The U. S? Or do you still sort of want to grind out on your current path, which you have

[Neal Menashe, CEO & Board of Director at Super Group]

Well, we'll see what's out there. Listen, we're always looking we're always looking at the process to be right both ways. And so yeah. So but I also think now, you you know, I think our our our performance shows we we we we we honor that this is a formidable company. And we've got the cash.

[Neal Menashe, CEO & Board of Director at Super Group]

We've got no debt. We can get debt facilities if we want. We've got everything available to us. We're working all of it. I think one of the big things was this quarter was going in US dollars.

[Neal Menashe, CEO & Board of Director at Super Group]

It just makes it easier, and you can see it. And we've got a big marketing budget. So we've got everything. It's just how we deploy this. We're working every day to deploy this in the most cost effective profitable way.

[Mike Hickey, Equity Research Analyst at The Benchmark Company LLC]

Thank you, Neil. Perfect. Appreciate you guys. Thanks.

[Operator]

We have no further questions, so I hand back to Neil Menashe, CEO, for closing remarks.

[Neal Menashe, CEO & Board of Director at Super Group]

Okay. So thanks, everyone. Thanks for joining. We'll talk to you in August when we release our second quarter results, and we are really looking forward to meeting all of you at our Investor Day on September in London. Thank you.

[Nkem Ojougboh, Head of IR at Super Group]

See you soon.

[Operator]

This concludes today's call. Thank you for joining. You may now disconnect your lines.

Participants

Executives

• Nkem Ojougboh, Head of IR
• Neal Menashe, CEO & Board of Director
• Neal Menashe, Chief Executive Officer
• Alinda Van Wyk, CFO & Director

Analysts

• Jed Kelly, Managing Director - Equity Research at Oppenheimer & Co. Inc.
• Jason Tilchen, Director & Senior Equity research Analyst at Canaccord Genuity Inc
• Clark Lampen, Managing Director at BTIG
• Bernie Mcternan, Senior Research Analyst at Needham & Company
• Mike Hickey, Equity Research Analyst at The Benchmark Company LLC