The Stars Group Inc has reported its financial results for the third quarter ended September 30, 2018 alongside additional highlights and updates including its sports betting activities in the US. Total revenues for the quarter increased 73.6% year-over-year primarily as a result of the contribution of revenue from the acquisitions of Sky Betting & Gaming and BetEasy, as well as organic growth in the international segment.

Adjusted EBITDA for the quarter increased 27.3% year-over-year, again driven mainly by the impact of the acquisitions of SBG and BetEasy and by increased gross profit from organic growth within the International segment. Adjusted EBITDA margin for the quarter decreased 26.7% year-over-year, due to the higher contribution from the betting and gaming verticals within each segment.

On US sports betting, the company noted: “On August 10, 2018, The Stars Group and Mount Airy Casino Resort announced a partnership to enter Pennsylvania‘s online sports wagering and gaming market, where The Stars Group will offer to customers in Pennsylvania its online poker, casino (including slots and tables) and sports wagering products.

“On September 13, 2018, The Stars Group launched its BetStars online sports betting brand in New Jersey through its partnership with Resorts Casino Hotel. The offering, which is initially available through mobile, provides New Jersey customers with an innovative and robust mobile-led sportsbook alongside The Stars Group’s already existing online poker and casino offerings available through the PokerStarsNJ and PokerStars Casino NJ brands.”

Stars Group CEO Rafi Ashkenazi summarized: “This was a landmark quarter during a transformative year for the company as we begin to deliver on our vision to become the world’s favorite iGaming destination. We completed our acquisition of Sky Betting & Gaming, which was cleared by the CMA in October, making us the leader in the UK online betting and gaming market. We also launched BetEasy in Australia and sports betting in New Jersey.”

“We are pleased with our quarterly results, which reflect both continued organic growth from our International business and contributions from both BetEasy and Sky Betting & Gaming, despite unfavorable sporting results during the period. As we continue our transformation and look towards 2019, we are excited to take advantage of the opportunities ahead of us by leveraging our leading positions in attractive markets, strong brands, technology and operating expertise.”


Three Months Ended September 30 Nine Months Ended September 30
In thousands of U.S. Dollars

(except percentages and per share amounts)

2018 2017 %
2018 2017 %
Total Revenue 571,983 329,443 73.6% 1,376,386 952,065 44.6%
Gross Profit 442,757 266,966 65.8% 1,083,259 774,460 39.9%
Operating Income 70,901 118,724 (40.3%) 185,832 335,128 (44.5%)
Net Earnings (loss) 9,730 75,874 (87.2%) (70,733) 212,110 (133.3%)
Adjusted Net Earnings ¹ 119,500 119,595 (0.1%) 389,285 346,990 12.2%
Adjusted EBITDA ¹ 198,252 155,767 27.3% 541,545 453,305 19.5%
Adjusted EBITDA Margin ¹ 34.7% 47.3% (26.7%) 39.3% 47.6% (17.4%)
Diluted (loss) earnings per Common Share ($/Share) 0.06 0.37 (84.9%) (0.34) 1.05 (132.3%)
Adjusted Diluted Net Earnings per Share ($/Share) ¹ 0.45 0.58 (23.8%) 1.67 1.71 (2.2%)
Net cash flows from operating activities 73,227 144,870 (49.5%) 369,307 370,843 (0.4%)
Free Cash Flow ¹ (26,723) 95,306 (128.0%) 140,392 255,028 (45.0%)