David Williams | 07 Aug 2018
Online casino company LeoVegas has posted its financial records for the second quarter of 2018,which ended on 30 June. Record amounts were brought in during the period under review, with Chief Executive Officer Gustav Hagman attributing this to data-driven strategic decisions.
One of the most impressive indicators was that LeoVegas’s EBITDA, which stands for Earnings Before Interest, Taxes, Depreciation and Amortisation, has more than doubled since the same period in 2017. The EBITDA for 2018’s Q2 is €15 million.
Revenues have also climbed in comparison with the second quarter of 2017, rising by 76% to €87.4 million. The acquisition of Royal Panda and Rocket X, two very successful brands, went a long way to boosting revenue figures.
The volume of depositing customers increased too, going to 309,987, which is 79% higher than in 2017. In addition to generating more earnings, LeoVegas also spent less on marketing; costs were lower in relation to the expected margins to revenue.
While acquiring Rocket X and Royal Panda certainly made a large impact on generated revenue, Hagman said the main explanation for the record profits was the lower marketing expenses. Commenting on the results, he explained that his company has been using a marketing model that is based on data and research.
The mechanics of the model are such that the operator only invests if there is a high-enough return in their marketing channels. In the recent FIFA World Cup held in Russia, operators whose primary focus is sports betting increased their advertising budgets considerably. As a result, the long-term customer value of the marketing that LeoVegas had in place was deemed uncertain.
In essence, the model indicated that the company should not advertise on certain channels. Complying was simple; all they did was refrain from spending money on those channels. The net results was a slight dip in growth, but a considerably higher EBITDA.
The flexible capacity of LeoVegas to respond to such data-driven information is, according to Hagman, a major asset. He explains that the experiences the company offers can be adapted to local preferences, so that they are always providing what their target audience wants.
Hagman added that they hope to use more providers in the same brand to provide the best for each of their customers. The recent purchases of Rocket X and Royal Panda suggest that this is already working, given the jump in revenues for 2018’s Q2.