NeoGames S.A.

Thank you, Operator, and good morning. By now, everyone should have access to our third quarter 2021 earnings release, which is available on the NeoGames website at www.neogames.com in the investor relations section. Before we begin our formal remarks, we need to remind everyone that the discussion today includes forward-looking statements. These forward-looking statements, which are usually identified by words such as will, expect, anticipate, should, or other similar phrases are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore you should exercise caution when interpreting and relying on them. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. We encourage investors to review our regulatory filings, including the form 6K for the quarter ended September 30th, 2021, when it is filed with the SEC. During today's call, we will discuss non-IFRS financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with IFRS. A reconciliation of these measures to the most directly comparable IFRS measures is available in our earnings release and on the neogames.com website. Hosting the call today, we have Moti Malul, Neogames Chief Executive Officer, and Raviv Adler, Chief Financial Officer of the company. They will provide some opening remarks, and then we will open the call to questions. And with that, I'm turning the call over to Moti.

Thank you, Jacques, and good morning, everyone. Welcome to our third quarter earnings call. This morning, I will highlight some key points about the third quarter performance and provide an update on the trends we're seeing in the market. Afterwards, I will turn the call over to Raviv to run through our financials and business performance. This quarter, we continued to progress our goals across key aspects of our business. For example, despite expected seasonality, we have seen growth in several of our accounts such as Virginia and New Hampshire, which continue to outperform expectations as the iLottery programs flourish and receive a strong reception in these markets. In Canada, we continued our investment in additional expansion of gaming verticals to power the very successful PlayAlberta brand by launching online sport betting, further to previous quarter investments in draw games and live dealer verticals. We continue to create and roll out unique content and enhance the player experiences. During the quarter, we began the rollout of our multi-game progressive jackpot feature across selected e-instant games from our NeoGames studio, with three of our customers significantly diversifying their games offering. The attraction and engagement of players with this feature enabled part of the growth we have seen in the quarter. Overall, we continue to significantly grow our business year over year. For the third quarter, revenues were $12 million, while our share of NPI revenues for the quarter was $8.3 million. Looking at the two components added together, they equate $20.2 million for the third quarter of 2021, representing growth of approximately 30% year over year. In terms of EBITDA, for the third quarter 2021, we generated adjusted EBITDA of $7.5 million. As a reminder, our EBITDA margins fluctuate and reflect investments in technology and operations as we continue to roll out across the new markets we are entering. For example, this quarter, much of this investment has been due to recent launches in Alberta of draw games late in the second quarter and sport betting in the third quarter, which introduced both new tech investments as well as some operational learnings. Most of these product investments have been one-time in nature, and we do not expect further extraordinary spending for the remainder of this year. Moving on to some other business updates, in Michigan, much is anticipated Results were impacted sequentially due to the various factors we have mentioned in previous reports, a combination of seasonality, post-COVID patterns, as well as heavy marketing spend by the iGaming competition in the state, especially towards quarter end. We continue to work closely to support the measured and disciplined approach demonstrated by the state lottery with its iLottery program building on foundations that we are confident will lead to sustainable, long-term growth of the program in this state, as we have seen in other markets with similar landscapes. On the gains front, we continue to view our constant rollout of gains with more customers around the world as an investment into future growth. In this regard, subsequent to quarter-ends, we launched our first suite of premium instant games with Lottomatica in Italy, further expanding our footprint in the Italian lottery market, where we now serve both Italian lotteries with our games content. One other good point of progress is our strong partnership with Caesars Entertainment, which continues to evolve and expand. In this quarter, we went live in Arizona where our technology is integrated into their unique Liberty platform for online sports betting and iGaming, which is now live in 10 markets and growing into the future. The regulatory environment and state authorization in the U.S. for iLottery continues to develop. This quarter, we have seen two states in different stages of the procurement process. The Connecticut Lottery commenced a public procurement process for an iLottery solution and services, and the West Virginia Lottery conducted an RFI process to gather information and insights on successful iLottery deployments as a precursor to a potential full procurement process, which may be expected in 2022. With that, I'll now turn the call over to Raviv.

Thanks, Moti. Before I get into the results, as a reminder, when we discuss our results, I would point out that all of our iLottery business in North America operates through our 50-50 joint venture, Neapolitan Interactive, or NPI, except in Michigan, which is reflected in our top-line revenues. Our contract in Virginia, New Hampshire, North Carolina, and the province of Alberta run through NPI. Except for the NPI contracts, we conduct all of our business through Neogames. As a result, from an accounting standpoint, as many of you know, we generate revenue and earnings through our only-owned operation and through our equity interest in NPI. Our revenue as reported on the income statement, which excludes our share of NPI revenues, was $11.9 million during the third quarter of 2021, down 8.8% over the same period last year. Our share of NPI revenue was $8.3 $8.3 million during the third quarter of 2021, compared with $2.5 million last year. The sum total of these two numbers was $20.2 million during the third quarter, representing an increase of about 30% year-over-year. Moving to EBITDA update for the quarter, our adjusted EBITDA was $7.5 million, which is down 3.8% compared with the $7.8 million last year. Sequentially, it's important to note that the fluctuation in our EBITDA margins is generally driven by two main factors. The first is that the new accounts and products ramp up. We often see increased costs earlier in the life cycle that stabilize over time. Secondly, differences in the product and services mix in gaming verticals offering drive varying margins. For example, on one hand, accounts that have limited offerings such as draw-based games only, or on the other hand, accounts with very wide offering, including gaming verticals, where we incur costs of third-party content drive lower margin than our average. As Moti mentioned, this quarter we have seen impacts on our EBITDA mainly associated with investment in both technology as well as in operational learnings, primarily in our operations in Alberta. These investments, by most, have been one-time in nature, and therefore we do not anticipate similar impacts in the remainder of the year. Overall, we are comfortable with where margins are and where they will be as the business matures. Diversifying and growing not only the customer base but also product types is an important element of our growth strategy as we wish to provide turnkey solutions to our customers. Turning to our balance sheet, we ended this quarter with about $68.2 million worth of cash. Our outstanding debt to the quarter was approximately $33 million at the weighted average interest rate of 1%, leaving us in a net cash position of $35.2 million. we have 25.2 million shares outstanding at the quarter end. During the quarter, we successfully completed an underwriting public secondary offering by one of our shareholders of almost 4 million shares of common stock, significantly increasing our public float. Regarding guidance, we are encouraged by the trends toward the end of the quarter and into early fall with some of our key accounts, enough to allow us to increase our overall annual revenue guidance to be between $82.5 and $84.5 million. At the midpoint, these revisions represent an increase of 5.2% compared to our prior range and represent year-over-year growth of approximately 42%. As we've indicated in the past, the revenue guidance does not include launching any new turnkey accounts. With that, I will turn the call back to Moti.