888 anticipates 10% Q3 revenue decline in mixed performance outlook

Online betting and gaming company 888 Holdings has released an update on its current financial performance and fiscal year 2023 projections. The company reported a mixed performance across the group, anticipating a decline of approximately 10% in overall revenue for the third quarter of 2023, which is expected to reach around £400 million ($488.2 million).

“We are making significant strides to improve the quality and long-term sustainability of our revenues, but performance in Q3 has been below our expectations, and this means we now expect to end the year with EBITDA below our prior expectation,” Executive Chair Lord Mendelsohn said in a statement.

The company, which operates 888casino, 888poker, 888sport among other brands, said it now expected fiscal 2023 adjusted core profit margin to be about 18-19%, down from 20% guided previously.

Ongoing significant impact from compliance changes implemented in dotcom markets, customer-friendly sports results impacting win margin across both UK and International markets in September, the ongoing impact of safer gambling changes within the UK, and the short-term impact from the change in marketing approach are attributed as the main drivers of the year-over-year revenue decline.

Despite the overall drop, the company said its retail business continues to perform strongly, with broadly stable revenues relative to last year.

The company said it now expects revenues in Q4 2023 to be sequentially higher than Q3 2023 but lower year over year by a mid-single digit, before returning to growth in 2024.

“We are strongly focused on investing to deliver good levels of expected revenue growth in 2024 as we progress towards our clear target of more than £2 billion ($2.44 billion) of revenue in 2025 and I look forward to the coming years with confidence,” Mendelsohn added.

888 recently reported a 165% growth in revenue for the first half of 2023, amounting to £882 million ($1.12 billion) and with Adjusted EBITDA surging by an impressive 211%, reaching £155.6 million (about $198 million). Despite the revenue jump, the group reported an after-tax loss of £33 million ($41.9 million) for the period compared to profit-after-tax of £12 million (approximately $15 million) in H1-22.