Good morning, everyone, and thank you for joining us today to discuss Super Group's results for the first quarter of 2024. My name is Jake Pisano, Vice President of ICR. During this call, Super Group may make comments of a forward-looking nature that are subject to risks, uncertainties and other factors discussed further in its SEC filings that could cause its actual results to differ materially from historical results or from the company's forecast. Super Group assumes no responsibility to update forward-looking statements other than as required by law. On today's call, Super Group may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for measures of financial performance prepared in accordance with GAAP. Super Group has provided a reconciliation of the non-GAAP financial measures to the most comparable GAAP figures in the press release issued earlier today and available on the Investor Relations page of Super Group's website. In addition, Super Group will speak to its financial results and metrics in 2 parts, highlighting Super Group's profitable and cash-generative global business separately from its investment into the U.S. This aligns with the annual guidance that Super Group has provided for 2024 and is consistent with both how Super Group views its business internally and how Super Group will report going forward. Super Group recommends that investors refer to as supplementary presentation posted to their website. On this call, I am joined by Neal Menashe, Chief Executive Officer. And during the Q&A session, we will be joined by Alinda Van Wyk, Chief Financial Officer; and Richard Hasson, President and Chief Commercial Officer. And now I would like to turn the call over to Neal. Neal?

Thank you. Good morning, everyone, and welcome to Super Group's First Quarter 2024 Earnings Call. Before I discuss this quarter, I'd like to quickly touch on a change to the format of our earnings calls. Starting today, our prepared remarks will be shorter than before, but we are posting a more detailed investor presentation to our website. We hope to use this time each quarter for greater dialogue with the sell-side community and to answer as many questions as possible. Let's now dive into the quarter. We are off to a phenomenal start for Q1. Total revenue ex U.S. was the highest ever for a first quarter at EUR 374 million. This represents growth of 13%, which in constant currency is even more impressive at 17%. Adjusted EBITDA ex U.S. also set a first quarter record at EUR 69 million. That's 29% growth from last year and a healthy margin of over 18%. The strong performance this quarter can be largely attributed to our focused and continued investment into core markets. We continue to invest in marketing, and as a percentage of net revenue was 27%. This ratio is always higher in the first half of the year, and we expect this to trend back towards 25% for the full year. Thus, the approach here is simple. We enhance our future growth profile by ongoing reinvestment into areas that are yielding the highest ROI. We are pleased with the progress we have made on the realization of cost efficiencies. Our operating expenses as a percentage of net revenue fell to below 19% for the quarter as compared to 22% in Q1 2023. This is an ongoing process. And while we continue to invest into high-growth areas of the business, we remain focused on streamlining our expenses, creating leaner, more efficient…

[Operator Instructions] Our first question comes from the line of Jed Kelly of Oppenheimer.

Great. Can you just talk about the decision to bring your tech stack in-house, and then how we should potentially view that accelerating your sports betting? And then also, as we think about the balance of the year, can you talk about any comps we should be aware of in the back half? And then given that you did beat -- I think you beat 1Q EBITDA EUR 10 million above our estimate, any reason you didn't feel the need to raise guidance?

Okay, it's Neal here. So listen, we've talked about this for a long time. We've been in long negotiations to sort out -- to get our Betway global tech stack. We've now got it for the sports. And I think it's super important for us because it allows us to manage the teams together as one. We can obviously decide more on the road maps, decide exactly what we want. And remember, we are a tech company. The basis is everything lies in the customer -- the software we deliver and the experience we deliver to our customers. So for us, it's been a long time in the making, and we're super excited about this.

Regarding the raising of guidance -- thank you for your question. As we said, we expected that Q1 has started off with such a good momentum continuing into April, but it's still very early days for the year, and we will consider our position towards the end of Q2.

Got it. And then just as a follow-up, can you just give us how we should view your success of high casino in Canada? Where is that coming from? And then can you speak to any potential impact if Alberta legalizes betting?

It's Neal here. So obviously, we've seen good growth in Canada year-on-year and remains a good market for us. In Ontario, we are very -- we're pleased with our performance. Our customer retention in Ontario is now better than it was before regulation and our customer values are as good as they ever were. So for us, remember, we see Canada province by province. So the same way as it regulated in Ontario, we've obviously learned what we did well then, what we didn't, and we'll just apply that to any other provinces that can come about.

Our next question comes from Jason Tilchen of Canaccord.

First thing I wanted to ask about is Africa. There's been really strong momentum there for several quarters now. Your revenue mix is up significantly year-over-year in that market. I'm just wondering if there's anything additional you could provide in terms of what's working there from a product perspective? And sort of what does the road map look like for additional markets that you could enter in Africa over the next year or 2.

It's Neal again. So Africa is really doing well for us. Member across Africa, we've only just recently launched our Jackpot City pure-play casino. So that's got lots of growth ahead of it. We are seeing, obviously, great customer acquisition, great customer retention. We -- in 7 markets across Africa, there's still more growth in those individual markets. 1 or 2 of them are obviously excelling more than the others. So the work there is to make sure that every market can be as good as the other as our 2 largest ones. But again, I think our product offering is unique. We own our own tech stack there, and we are super localized for the region.

Great. That's really helpful. One or 2 other quick follow-ups. In terms of the Apricot deal, I was wondering if there's a way you can quantify sort of the cost savings that you expect to generate on an annual basis by having the sort of full ownership rather than having to sort of pay as a licensor.

Jason, Alinda here. We are very excited about that possibility because you have now previously 2 significant teams on different sides now working together. And we are quite far ahead with planning around resourcing and integrating the teams to work more effectively together and to have a better output as well as just tracking against one set of expectations. The teams just effectively work better together. So that was definitely on the forefront of doing this deal is to make it more cost efficient for us as a company.

And then I'll just add -- Neal here, and I'll just that also with the tech stack, we can then offer that into our Africa business, when we feel there's need to, plus we can maybe if any M&A comes available, we've got the tech stack to be able to deliver on that. So it's been a long time in negotiations, but we are finally done.

Okay. Great. That's really helpful. And just one quick final cleanup question here. In terms of the U.S., the loss sort of expanded year-over-year. Just wondering if there's anything to call out. Was there anything onetime in the quarter? And any sort of additional color you can provide on that strategic review.

Jason, so looking at quarter 1, it was the end of the completion of the migration onto the Betway Global Technologies that happened during March, some investment into marketing during the quarter. And then as we look to Q2, we expect the investment to be lower than it was during quarter 1.

The next question comes from Mike Hickey of Benchmark.

Congrats, guys. Great quarter. Just again on Apricot, the rather unique burn out there, Neal. I'm sort of curious on that piece, if you have anything incremental, it looks like some longevity there to maybe a payment. And then you talk about flexibility for organic growth and M&A opportunities. I'm curious on that, and if there's any sort of potential benefit to the USP study, you're obviously trying to figure out.

Okay. So I'll go first. So on the Apricot, as you can see, it's got a contingent earn-out and that's obviously -- I mean we have to more than double the revenue that it's currently on. So I think it's a risk-sharing approach then. And earnouts based on different thresholds of NGR, net gaming revenue that the sportsbook itself delivers. So I think it's all incentivized long term. But I think for the initial payment of the EUR 100 million plus in the EUR 40 million, I think that's a really good deal based on the tech stack that we're getting and that comes under ourselves. So I think overall, it's -- we managed to find a good ground between them and us to be able to deliver on this deal. And I think going forward, it allows us to, as Alinda said, integrate the teams, get going, understand the priorities and add on any other new businesses or our African business, if we see fit on our trading platform to be able to integrate then. So long term, I think this makes great sense and give us a great foundation now. On M&A, Richard.

So I think the point that Neal was making is our ability now that we own the sportsbook technology is to apply that should we proceed with any M&A, we're able to apply the ability to those businesses that we may acquire.

Yes, I guess the question was, is this M&A and organic growth with your own tech stack, does that help your U.S. business? Is that part of sort of the thinking about the broad brush strokes and how you sort of reshape the U.S. business, does that play into that potentially?

Yes. So the technology definitely forms part of our evaluation. As we said before, we're going through a detailed analysis of our options in the U.S. and the technology will be something which we consider as part of that process.

I guess is it worth sort of just laying out thinking about just, again, broad brush strokes here, guys, in terms of some of the options you're considering on your U.S. business?

Sure. So high level, we're evaluating, let's say, everything apart from the status quo, right? So as we told you in the last release, we are not happy with the status quo. Nothing is off the table at this stage, and it ranges from say, a complete exit all the way to status quo and everything in between. So we're going through extensive analysis at this point with the intention of coming back to you as soon as we can.

Okay. Fair enough. The -- I guess on the regulatory environment in the U.S., you guys have quite the background running the global business for as long as you have. Just sort of curious any updates here on the U.S. regulatory environment, the sort of pressure that's sort of early innings here, how that sort of impacts your business and how that plays into sort of how you're, again, looking to sort of reshape your approach to the U.S.

Yes. So I think absolutely -- so it's Neal here, absolutely, we've seen regulation and regulation becomes harder, then they come less hard, et cetera, and we've seen it from the U.K., which has now relaxed some of it -- some of the restrictions are same as Spain. So I think the U.S. is still early days in that journey. And it's also dependent on the regulations, the tax rates. So obviously, we're taking that all into account. But we've seen it without a negotiate through that. And for us, really, the U.S. states are no different to the countries. If we can see a way to profitability, we will then do them. And if we can't, then we have to take other action. But again, it's all about the extra revenue, the margins we can achieve in these states and in each country. And again, at our operating leverage worldwide is really at maximum potential here because every bit as I said of it, every bit of extra revenue, we deliver much higher EBITDA margins. And that's what this business is about. And what we have to do is take those margins, take the effectiveness of our marketing, the investment we're making in marketing and into these countries and make sure we're getting the best returns we can. And that's what we've been working for the last 2 years that and getting our cost structure right.

When you're in states in the U.S. that has casino and sportsbook, so you've got your Betway and Spin sort of working together. What's the profitability of those particular states?

I think they're probably better. Any state that's got casino in it is a much more profitable state for us. And that's because even if we look today, overall, we make up 80% of the revenue between Betway and Spin is made up of casinos. So I think it's quite obvious where the money is, and that's what we'll be targeting. We ought to target that more. And that's why we're super excited about Africa and Jackpot City that we've launched all -- or starting to launch more across the world because that's added casino revenue into the mix.

I guess, Neal, there is sort of, I think, the view that U.S. is a sportsbook market, but it seems like with only 6% of the population here legalized on casino. The feeling is that maybe the second stage of growth is the legalization of casino, which is sort of your lead spot. So I'm sort of curious, do you believe that the U.S. is in a position to sort of accelerate legalization and the casino over time? And do you think that, that, in fact, would be maybe the inflection point where you have both of those vehicles, your Betway and Spin working together that you could sort of elevate your profitability potential and growth.

I think absolutely. But obviously, casino regulations sometimes seems to take much longer than the sports, right? So -- and in different countries and different states have different views on the sports and casino. But for us across the globe is whenever they sports and casino, that's our sweet spot. So -- and my biggest thing with all these markets is -- and we've talked about it before, is the black market operators in those markets and the regulators having to regulate will action the black market operators because we've seen some European countries where they've regulated us, but then the black market operators continue and then you get a total misalignment between what the regulated people can do and what the unregulated. So there's that and that with the regulations. But again, for us is we've got a great brand in sports being Betway. And of course, we've -- and that's got a big casino business within it. And then, of course, we've got Spin. So we are perfectly poised to be able to take on these opportunities, but we've got to take on the right opportunities and give us the right profitability and the right returns.

Yes. Neal, last question for me. You've been gracious. I mean, given sort of how crucial the U.S. market is and given the opportunity to sort of awaken the casino side and really getting your sweet spot running both those assets together. I mean how would you weight the probability, I guess, of a full exit in the U.S. versus maybe just a recalibration of the states where you can concentrate and minimize your losses and/or potential M&A, which I don't know your appetite for a transformational deal, but I think they're out there. It just seems like the idea of exiting, given how much potential there is particular in casino, like you said, maybe it takes some time, but the upside here could be tremendous. So could you just sort of help us work through...

Yes. So I think the way you explained it is perfectly correct. Of course, when it comes to transformational M&A, you can't do a deal if the other parties well overvalued. That's number one. You've only got one chance at a transformational deal and you got to get it drive, and it's going to be fair value to both sides. So that's the first point. The second point, when it comes to the U.S., absolutely, what you say is we're looking at all the options. We understand all the options, and we've got to make a decision that is long term in the best interest of it. And again, as you pointed out, casino is our bread and butter. So we don't want to -- we want to be able to make -- find a way to profitability in those markets. And that's absolutely -- and listen, this is a waiting game. A game, over time, different states can regulate and you got to be in place to have a chance of success, and we fully understand that. But there's a cost for being in play and we just got to make sure what that cost is and weigh it to up.

Our next question comes from Bernie McTernan of Needham.

This is Stefanos Crist calling in for Bernie. First on Africa, kind of a nitpicky question, but the wording, so the transaction brings Super Group closer to its goal of fully owning and controlling its tech. Are there other parts of the tech stack that you're looking to acquire or maybe build in-house? Just your thoughts there.

Yes. Yes. So just on that remember different parts of our business, some of them own our PAM and some don't. So I suppose this is -- the sportsbook is now completely owned once we get regulatory approval. So that's why -- so that was referring to. So there are some of the PAM that we don't own, but there are businesses that do own it. So we've actually got everything now in the tech stack that we need.

Got it. And then the migration onto the Betway Global Technology completed at the end of March. Just anything you could speak to since that integration, I guess it's been a little over a month now.

Yes. It's just that it has been a relatively short period of time and all of that data, which we're now getting post migration is the exact data that we're using and analyzing in order to make the best decision about exactly what the right strategy is for the U.S. So it's still a matter of weeks. And that process, obviously, is being prioritized at the highest level that we're going through that data from this new platform. And that's what's going to feed into the ultimate decision about the best way forward.

I mean I'll just add in there, but it definitely is much better than what we were on before that significantly.

Got it. And then just last one for me. If there are any updates on Brazil regulation or anything you're looking to come in the near term?

I guess, like many others, we are actively looking at the market, understanding the process through licensing. And going through the process which with any market that's regulating about -- forming a view about the ability to make long-term profits and then we'll apply for a license there if we see fit.

At this time, there are no more questions. Thank you again for joining today's call. Conference call has now ended.