Super Group (SGHC) Limited Q3 FY2025 earnings call

Key Takeaways

• Hit a record of 6 million monthly active customers in September, surpassed in October.
• Upcoming Q4 launch of Super Coin, a South African rand-pegged digital asset stablecoin initiative.
• Raised full year group revenue and EBITDA 2025 guidance despite unfavorable sports outcomes in September.

Operational Performance

• Europe: Revenue up 46% YOY, U.K. +71%, Spain +11%; Germany impacted by regs and reduced marketing.
• Africa: 36% YOY growth, Botswana, Malawi, Tanzania, South Africa strong; Nigeria tech migration complete, Zambia navigating casino tax.
• North America: 14% YOY growth, Canada ex Ontario +15%, Ontario +3% with new client in H1 2026.
• APAC: 3% YOY growth, New Zealand down 2% due to marketing restrictions; Super Coin launch in Nov 2025 with Luno, digital asset wallet to launch Q1 2026 in SA.

Europe's revenue surged 46% year-over-year with the U.K. and Spain leading the charge, up 71% and 11%, respectively. Germany was impacted by tighter regulatory restrictions and reduced marketing spend. Africa delivered 36% year-over-year growth, driven by strong performance across all markets. Botswana was a standout, Malawi and Tanzania posted solid gains, South Africa grew 23% YOY, Nigeria completed migration to new tech platform, Zambia navigated casino tax headwinds. North America grew 14% year-over-year, Canada ex Ontario increased 15%, Ontario increased 3% with a new casino client launching in H1 2026. APAC revenue was up 3% year-over-year, with New Zealand declining 2% primarily due to marketing restrictions.

• Raised full-year 2025 group revenue to between $2.17 billion and $2.27 billion.
• Raised group adjusted EBITDA guidance to between $555 million and $565 million.
• Guidance reflects robust growth in monthly active customers, revenue mix diversification, and Q4 momentum.

• Germany impacted by tighter regulatory restrictions and reduced marketing spend.
• New Zealand marketing restrictions affecting revenue.
• Zambia casino tax headwinds.
• Unpredictable sports outcomes impacting sports margin.

Q: One thing I'm curious about, if you could share a little more detail regarding the magnitude of the difference in payments costs in Africa relative to some of the other markets you operate in and a little bit more about maybe the level of investment required in this initiative relative to the potential savings over time from reduced payments costs.

A: Yes. Not yet. So in Africa, because of the wallets and stuff, it's significantly more than other markets in the world. So with this initiative, it can over time, obviously reduce that. And yet, the cost involved in implementing the Super Coin haven't been excessive at all. It's actually quite -- it's easily manageable. And over time, obviously, with the engagement in the customer base going forward, we are really excited about this opportunity.

Q: I want to start on guidance. Adjusting for the tough sports comp in the prior year, 4Q revenue still implies slowing growth trends from what we've seen year-to-date. Are you seeing anything into November that would imply anything slowing across some of your major KPIs outside of just some of the poor sports results that have bled into October?

A: Thank you, Jordan, for your question. We -- in the guidance for the remainder of the year, we just assumed a normalized sports hold in line with around 14%. As you can see in the investor presentation, we've prepared a slide on that. We can't -- as you know, it's very tricky for us to have any kind of understanding of the impact of when it does have a outlier like in September. But what happened in September is well because July and August were so significantly higher, you do have a equalized quarter. So that's why we just kept it normalized. And we're also very excited about the continued momentum in the customer activity, fueled by also marketing efficiencies in line with our prior quarters. So that all will help deliver that last part of the year. And furthermore, we just have to rely on consistent execution and a seasonal supportive calendar.

Q: I think you highlighted we're kind of watching some tax developments here in a couple of countries in Africa and then potentially in the U.K. Can you just remind us how much of a tax cushion you baked in, in sort of some of the medium-term guidance you laid out at your recent Investor Day?

A: Yes. So remember, taxes, obviously, with us, the way to mitigate taxes is, #1, cost efficiencies. There's cost efficiencies in everything we do, then it's the product efficiencies and it's the marketing efficiencies. So all of that is coming together. And for us, we have lots of headroom there to take some of these tax increases. The big one, obviously, for everyone's mind is the U.K. and how much they plan to go up. But for us, we've got a resilient business model and we're growing. So yes, it might take some of the extra profit out of it. But with all the other savings coming in, we hope to mitigate against them.

Q: Pretty healthy margin level despite some negative sports results. Can you just talk about the puts and takes on margin in the quarter and if that's sustainable going forward?

A: Yes. Stefanos, directionally, 100%, our model benefits from mix towards higher-quality casino revenue. We also have the strong geographic diversification. And what we've been seeing, even though the sports results have been under pressure, we've seen increased parlay contribution, which had a favorable impact. Otherwise, what Neal and I constantly talk about our structural efficiencies as we roll out AI-enabled operations and disciplined processing negotiations, et cetera, we definitely believe that this margin is sustainable.

Q: Really nice results. Want to move around -- stay on the hold kind of the sports impact in September. If I look at August, it looked like it was kind of an outsized good guy for the sportsbook from a hold standpoint win, offset by September. Are you able to kind of net those 2 together throughout the whole quarter on kind of what the net impact was from sports gross margin impact relative to what you were expecting?

A: So I think it's on Slide 12 in the investor deck. We've included quite a nice slide now just to explain the ebbs and the flows of sports margin, which is obviously you can't really predict any of that. So what we've just started to see, like Neal explained as well is the timing of the matches and how the outcomes will now be a bit more favorable because -- for the -- for that -- for Betway, not for the customer maybe because of -- in the beginning, you have much more favorable that will. But on this slide, you will see we had a high of 18.8% and a low of 7.3%. So that we've actually marked now. So that average of 14% is what we kind of project forward. But net-net, over a period of time, the margin is increasing due to all -- everything that Neal has mentioned of more rollout of the parlay product in other parts of our -- which was quite dominant in Africa but now in other parts of the world as well as just customer engagement.

Q: Really nice results. Want to move around -- stay on the hold kind of the sports impact in September. If I look at August, it looked like it was kind of an outsized good guy for the sportsbook from a hold standpoint win, offset by September. Are you able to kind of net those 2 together throughout the whole quarter on kind of what the net impact was from sports gross margin impact relative to what you were expecting?

A: So I think it's on Slide 12 in the investor deck. We've included quite a nice slide now just to explain the ebbs and the flows of sports margin, which is obviously you can't really predict any of that. So what we've just started to see, like Neal explained as well is the timing of the matches and how the outcomes will now be a bit more favorable because -- for the -- for that -- for Betway, not for the customer maybe because of -- in the beginning, you have much more favorable that will. But on this slide, you will see we had a high of 18.8% and a low of 7.3%. So that we've actually marked now. So that average of 14% is what we kind of project forward. But net-net, over a period of time, the margin is increasing due to all -- everything that Neal has mentioned of more rollout of the parlay product in other parts of our -- which was quite dominant in Africa but now in other parts of the world as well as just customer engagement.

Q: Really nice results. Want to move around -- stay on the hold kind of the sports impact in September. If I look at August, it looked like it was kind of an outsized good guy for the sportsbook from a hold standpoint win, offset by September. Are you able to kind of net those 2 together throughout the whole quarter on kind of what the net impact was from sports gross margin impact relative to what you were expecting?

A: So I think it's on Slide 12 in the investor deck. We've included quite a nice slide now just to explain the ebbs and the flows of sports margin, which is obviously you can't really predict any of that. So what we've just started to see, like Neal explained as well is the timing of the matches and how the outcomes will now be a bit more favorable because -- for the -- for that -- for Betway, not for the customer maybe because of -- in the beginning, you have much more favorable that will. But on this slide, you will see we had a high of 18.8% and a low of 7.3%. So that we've actually marked now. So that average of 14% is what we kind of project forward. But net-net, over a period of time, the margin is increasing due to all -- everything that Neal has mentioned of more rollout of the parlay product in other parts of our -- which was quite dominant in Africa but now in other parts of the world as well as just customer engagement.

Q: The other piece on Africa, obviously, it just seems like a incredible opportunity for you guys near and long term. We noticed that Kenya has made a change to their tax scheme. And we know that you exited Kenya because of some, I guess, you could say one of your guys say ridiculous tax environment. Obviously, it wasn't great. You laughed and now they've got a change. Just curious your thoughts on that change and if you -- if it's significant enough that maybe you can reexamine that market as an opportunity. And if you think the new tax scheme may have positive implications for other countries where you operate?

A: Yes. I think that's -- I mean, that's actually a very good point. If you bring up Kenya, they had this excise tax on sports and casino where you could actually do it on sports, you couldn't actually apply it to casino. And it takes them like what 2 years or almost to do it. So yes, absolutely, that's a case that we could absolutely go back in and turn on the software. And it just means they finally found a mechanism that they are more comfortable in, which is taxing on deposits in and out, which is a much more fairer and easier way basically for them to monitor the tax collection. So Zambia also went against this excise tax. But I think the first time what we saw in Zambia is, as an industry, all of us came together to go and lobby the government to finally say you don't have casino there, you'll lose all this revenue and they're slowly lifting. And in Kenya, as we do it, Kenya goes with the exact model that we suggested for Zambia. So I think it's the ebb and flow. And as these new businesses come in, we are working with the government. So absolutely. And for us, I think the [indiscernible] point is that you have always got opportunities to go back in. And so and that's what we will do. And our products there, we just got to get the resource to be able to just turn it back on.

Q: Nice results. So wanted to start with the New Zealand regulatory news that we've seen in terms of the online gambling tax change and I guess, it's a fairly different licensing regime. I know that's been a smaller market and one that hasn't led to as much growth as others. But Neal, can you maybe just kind of touch on how you're feeling about the market and kind of how you think operators will react to this?

A: So again, it's still -- all these regulations are still in and out of the different committees in New Zealand. We are all over it. We've -- it's just a matter of when they actually finally decide that they are going to fully regulate it, especially this is all to do with casino, right? So we're all over it and what we are doing is -- and have been doing it for a while, is they've got certain advertising restrictions that we are adhering to. And that's very important where some other competitors aren't but we are because for us, it's all about the long-term longevity of that market for us. So we're doing that. We're able to do certain marketing, not others. So we've actually taken a constant stance there, which is why you see the growth not being what it is, also subject to there has been some devaluation of the New Zealand dollar.

Q: Just in terms of the strong capital position that you're in, any update in terms of how you're thinking about tuck-in or bolt-on M&A in this market?

A: So we look at this. Listen, we're highly selective. We don't want to overpay but also I don't think we can totally underpay either. So we have to find that balance. But at the moment, we make small, tiny little ones along the way, marketing ones, et cetera. But it's all about, is it at the right price and does it work? And we can't just base these acquisitions on synergies, right? They've got to stand on their own 2 feet. So when we find the right ones, it's not that we're not looking, we've got a long list, it's got to make sense for us, right? And that's what we're doing. And really, what we're also doing is, operational side, is we're working out where we need to bolt on along the way. So it's in the marketing domains, if it's in other stuff, et cetera, which is what we're doing. It's like -- the Super Coin one is another example. We bought a [indiscernible] license. We had to buy it from [indiscernible]. So we bolt on these smaller ones along the way. [indiscernible] comes, we're all open.