Super Group (SGHC) Limited Q2 FY2025 earnings call

• Hired Super Group's first Group Chief Technology Officer to drive innovation and efficiency. - Appointed Deloitte as external auditor. - Intention to exit U.S. iGaming market for capital discipline. - Record total revenue of $579M and adjusted EBITDA of $157M, up 30% and 78% Y/Y respectively. - Strong operating leverage with 27% margin, driven by sports outcomes, pricing, and casino performance. - Plan to invest in crypto space and roll out Jackpot City in several markets.

Europe: Revenue surged 53% year-over-year, with the U.K. leading at 83% growth. Spain and Ireland also saw growth, while Germany had revenue decline but EBITDA grew due to cost management. Africa: Grew 59% year-over-year, with Ghana up 63%, South Africa up 31%, and Botswana (launched in Feb) delivering remarkable growth. North America: Grew 23% year-over-year, with Canada (ex-Ontario) up 22%, Ontario up 5%, and U.S. revenue up 112% but exit planned. APAC: Revenue down 6% year-over-year, with New Zealand down 13% due to currency and macroeconomic headwinds.

• Raised full-year 2025 ex-U.S. adjusted EBITDA guidance to $500M-$510M from over $480M. - Group adjusted EBITDA expected to be between $470M-$480M, inclusive of U.S. adjusted EBITDA loss of $30M. - Future upside from global sporting events, enhanced trading, and casino strength.

• U.S. market dynamics and regulatory changes impacting profitability. - Tighter regulatory restrictions in Germany affecting revenue. - Macroeconomic headwinds and currency issues in APAC. - Banking challenges in Africa affecting payment processing costs for crypto implementation.

Q: Ryan Sigdahl asks about guidance and U.S. exit, with Neal Menashe responding on sports calendar impact and U.S. exit rationale.

A: Neal Menashe says July started well, U.S. exit due to high cost of revenue, and reallocation of resources. Alinda Van Wyk discusses cost savings and cash flow impact.

Q: Jason Tilchen asks about marketing channels and sportsbook margin improvement.

A: Neal Menashe talks about marketing efficiency and sports results impacting margin, with focus on parlay mix and product improvement.

Q: Jordan Bender inquires about gaming margin ceiling and crypto impact on payment costs.

A: Neal Menashe mentions potential for 30% margins with scale, and crypto helping in Africa's banking cost issues.

Q: Bernard McTernan asks about competitive pressures in Ontario and new CTO role.

A: Neal Menashe discusses competitive pressures and CTO role for platform integration and cost efficiencies.

Q: Jed Kelly asks about platform upgrade in Africa and capital deployment.

A: Alinda Van Wyk talks about Africa platform upgrade benefits, and capital deployment via dividends and high-return investments.

Q: Mike Hickey asks about margin growth and Africa market comparison.

A: Neal Menashe discusses margin potential, Africa market successes, and Nigeria recalibration.