Playtech PLC (LSE:PTEC) shares surged 7.3% after issuing a trading update stating that underlying earnings (EBITDA) are now expected to be "slightly ahead" of current City forecasts.
Playtech also announced a new deal with Mexico's Caliplay.
Earnings growth was primarily driven by a strong performance within the B2B division, the gambling technology company said, supported by revenue growth in the Americas and cost efficiencies.
An agreement has also been reached with Mexican partner Caliplay, where Playtech has amended terms to hold a 30.8% stake in the new US-based holding company Caliente Interactive Inc. This means it will be entitled to receive dividends and gain the right to appoint a director to the board.
A revised eight-year B2B software licence and services deal has also been agreed, along with confirmation that US$150 million in unpaid fees has been received.
Additionally, US$140 million in cash payments will be made over four years.
Caliplay's financial performance was confirmed, with a strong start to 2024.
Good strategic progress continues to be made in the US and Canada, which delivered very strong growth, albeit from a small base. There was also a growing contribution from Colombia.
Playtech CEO Mor Weizer said the deal represents "the beginning of an exciting new chapter", following nine years of collaboration to create the digital business in Mexico.
"The agreement with Caliente and Caliplay underlines the attractiveness of Playtech's leading proprietary technology. With a strong position in Mexico and exposure to other fast-growing markets in the Americas and Europe, we remain well-placed to deliver strong growth in our B2B business in the coming years," he said.