In an upbeat set of third-quarter results, Net Entertainment A.B. said today that it has rebounded well from the seasonal slowdown and, bolstered by a strong stream of licensing agreements, is not seeing stunted growth reported by other of the listed sector's key players.
The Stockholm company, best known for its CasinoModule software, reported revenue rose 63 percent to 52.6 million Swedish kronor compared to 32.2 million Swedish kronor during the same period last year. Between the second and third quarter, revenue rose 9 percent.
Strikingly, net profits jumped 99.7 percent to 19.9 million Swedish kronor versus last year for a net margin of 38.1 percent.
NetEnt is a casino software-specific company that does not dabble in real-money operations. Its primary competitors, according to its 2007 results, are Microgaming Software Systems Ltd., CryptoLogic Ltd., Realtime Gaming, Playtech Ltd., Boss Media A.B and Chartwell Technology Inc.
By its own estimate, the company has share of around 10 percent of the online casino market. Its licensees are primarily sports betting operators and its end users are, predominantly, males between the ages of 25 and 35.
The company's growth since the second quarter of 2007 can undoubtedly be attributed to its uptake and launch of new licensees. NetEnt signed 18 clients in the 2007 fiscal year and 16 already this year. It has a portfolio of approximately 60 licensees, 17 of which have yet to launch.
"The primary driving force is volume growth with our existing customers and infusion of new," Johan Öhman, the company's chief executive, said in today's results.
NetEnt listed on the Nordic Growth Market last year but is in the process of moving to the OMX Nordic Exchange Stockholm. Trading there should begin in early 2009, the company said.
Fourth-quarter trading has started "strong," Mr. Öhman said.
NetEnt was founded in 1996 but demerged from Betsson A.B. -- which traded previously as Cherryföretagen A.B. -- in 2006.
Shares in the company closed up 10.58 percent at 23 Swedish kronor.
Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.