Bragg
Bragg Gaming Group Reports Record First Quarter Results As Revenue Rises 36.4% To €19.4 Million (Usd $20.5 Million)
Bragg Gaming Group, a global B2B gaming technology and content provider, today reported record financial results for the first quarter ended March 31, 2022. The Company also provided an update on its strategic growth initiatives and reiterated its full year 2022 revenue and Adjusted EBITDA guidance.
Summary of Q1 2022 Financial and Operational Highlights
| Euros (millions) | Q1 2022 | Q1 2021 | Change |
| Revenue | €19.4 | €14.2 | 36.4% |
| Gross profit | €10.0 | €6.6 | 50.7% |
| Gross profit margin | 51.8% | 46.8% | 490bps |
| Adjusted EBITDA | €3.0 | €2.3 | 26.2% |
| Adjusted EBITDA margin | 15.3% | 16.5% | -120bps |
| Wagering revenue | €3.8B | €3.8B | 0.8% |
Note: Bragg’s reporting currency is Euros. The exchange rate provided for U.S. dollars is 1.056. Due to fluctuating currency exchange, this rate is provided for convenience only.
Management Commentary
“Our momentum continued in the first quarter as the successful execution of our growth intiatives focused on offering more higher-margin proprietary and third-party exclusive games and our iGaming PAM, combined with ongoing expansion into new regulated iGaming markets, drove strong growth in our operating results,” said Yaniv Spielberg, Chief Strategy Officer for Bragg Gaming. “In the first quarter, we generated quarterly record revenue of EUR €19.4 million (USD $20.5 million), gross profit of EUR €10.0 million (USD $10.6 million), and Adjusted EBITDA of EUR €3.0 million (USD $3.2 million). These record financial results reflect, in part, growing revenue from higher gross margin in-house content and platform revenue which together drove record quarterly gross profit margin of 51.8%, an 80 basis point improvement over our prior gross profit margin record achieved in 4Q 2021. The record quarterly margin supports our confidence that we have the right operating plan in place to achieve our goal of growing gross profit margin to approximately 60% by 2024.
“The benefit of our initiative to offer more new propriety games and exclusive third-party online content is evident in the success of several recently introduced, internally developed games. Our newest games, Gold Party, Egyptian Magic and Fairy Dust, continue to perform well, with attractive, sustained player engagement. Going forward we will continue to execute on our detailed plan to customize many of the proprietary games we introduce, including the more than 35 new titles planned for this year, to address local market player preferences in Europe and North America, which we expect will generate attractive returns on our game development investments. At the same time, we continue to increase our exclusive content licensing agreements with leading game developers. With their strong performance and significantly higher margins compared to our aggregated content, our proprietary and exclusive third-party games initiative positions Bragg for continued revenue growth and the attainment of our margin growth goals.
“We also continue to significantly grow our presence in regulated global iGaming markets. Over the last 16 months, we have gone live with our iGaming content and/or platform in eight regulated European markets, including Portugal and the Czech Republic most recently, and marked our initial entry into the Americas with our content going live last month in Ontario with a Tier 1 operator, as well as the Bahamas late in Q1. We expect to grow our presence in Ontario over the next several months through aggreements with additional large, well-known operators. Our total addressable market (“TAM”) is now approximately USD $13.5 billion. We expect this to continue to grow as we go live in Italy and several U.S states later this year. We are on track to complete our acquisition of Spin Games later this month, upon receipt of the remaning required regulatory approval. Reflecting the substantial progress with our integration of Spin Games’ technology platform with our ORYX platform, our already completed submissions of these integrations for certification by various U.S. gaming laboratories, and Spin Games’ existing relationships with more than 30 U.S. iGaming operators, we expect to introduce our iGaming content in regulated U.S. markets very quickly following the close of the acquisition. Our content offerings and platform capabilities offer compelling solutions for operators and engaging iGaming content for players and are helping to drive our strong performance in the Netherlands since we went live there in late in 2021, as well as in other newer markets. As we further expand the markets we address, we expect to leverage our expertise and product and technology advantages to drive continued growth.”
Mr. Spielberg concluded, “We are off to a strong start to the year and while we are reiterating our guidance for 2022 full year revenue of EUR €68-72 million (USD $72-76 million) and Adjusted EBITDA of EUR €9.5-10.5 million (USD $10.0-11.1 million) given it is still very early in the year, we believe our continuing business momentum positions Bragg for the potential of another strong year of outperformance relative to this outlook. Finally, our attractive business model provides us with the flexibility to fund our aggressive new market expansion and proprietary game development growth initiatives through organic cash flow growth, which will support our goal of delivering new near- and long-term shareholder value.”
First Quarter 2022 Financial Results and other Key Metrics Highlights
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Revenue increased by 36.4% to EUR €19.4 million (USD $20.5 million) in Q1 2022 compared to EUR €14.2 million (USD $15.0 million) in Q1 2021.
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Wagering revenue generated by customers of EUR €3.8 billion (USD $4.0 billion) was in line with wagering revenue generated by customers of EUR €3.8 billion (USD $4.0 billion) in Q1 2021. Wagering revenue in Q1 2022 reflects changes in product mix towards PAM, managed services and proprietary content, which drove improved gross profit and Adjusted EBITDA.
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Gross profit increased 50.7% to EUR €10.0 million (USD $10.6 million) from EUR €6.6 million (USD $7.0 million) in Q1 2021, reflecting higher revenue and a 490-basis point year over year margin improvement to 51.8%.
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The margin expansion is primarily the result of the continued shift towards a higher proportion of revenues from iGaming and turnkey services, which have lower associated cost of sales when compared to games and content. The higher mix of iGaming revenues includes an increase in revenues from proprietary games which have no cost of sales.
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Net loss for the period was EUR €0.7 million (USD $0.7 million), a decline from a net loss of EUR €1.1 million (USD $1.2 million) in Q1 2021, primarily due to higher gross profit and lower transactional costs, partially offset by an incremental increase in employee costs, professional fees, sales and marketing expense, and higher depreciation and amortization.
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Adjusted EBITDA was EUR €3.0 million (USD $3.2 million), an increase of 26.2% compared to EUR €2.3 million (USD $2.4 million) in Q1 2021. Adjusted EBITDA margin decreased by 120 basis points to 15.3%, reflecting the Company’s higher investments in software development, product, and senior management functions to execute the growth initiatives implemented in mid-2021. The Adjusted EBITDA margin increased on a quarterly sequential basis by 550 basis points.
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Cash and cash equivalents as of March 31, 2022 was EUR €18.4 million (USD $19.4 million).
Reiterates Full Year 2022 Revenue and Adjusted EBITDA Guidance
Bragg today reiterated its outlook for 2022 full year expected revenue of EUR €68-72 million (USD $72-76 million) and Adjusted EBITDA of EUR €9.5-10.5 million (USD $10.0-11.1 million). The midpoints of the 2022 revenue and Adjusted EBITDA guidance ranges represent growth of 20% and 39%, respectively, over the reported full year 2021 revenue and Adjusted EBITDA.
Bragg
Bragg Gaming Group Announces Record Third Quarter 2024 Revenue of Eur 26.2 Million (USD 29.3 Million)
Bragg Gaming Group, a global B2B content-driven iGaming technology provider, reported record revenue for the third quarter of 2024.
Summary of 3Q24 Financial and Operational Highlights
| Euros (millions)(1) | 3Q24 | 3Q23 | Change |
| Revenue | € 26.2 | € 22.6 | 15.9 % |
| Gross profit | € 14.0 | € 11.9 | 18.1 % |
| Gross profit margin | 53.5 % | 52.5 % | 99 bps |
| Adjusted EBITDA(2) | € 4.1 | € 3.8 | 7.1 % |
| Adjusted EBITDA margin | 15.6 % | 16.9 % | (129) bps |
| Operating Income (Loss) | € (0.4) | € (2.1) | (81.0) % |
(1) Bragg’s reporting currency is Euros. The exchange rate provided is EUR 1.00 = USD 1.12. Due to fluctuating currency exchange rates, this reference rate is provided for convenience only.
(2) “Adjusted EBITDA” is a non-IFRS measure. For important information on the Company’s non-IFRS measures, see “Non-IFRS Financial Measures” below.
Chief Executive Officer Commentary
Matevž Mazij, Chief Executive Officer for Bragg, commented, “The third quarter marked another period of strong growth and record results for Bragg. Revenue grew 16% year-over-year, gross profit increased 18%, and Adjusted EBITDA rose 7%. In the U.S., strong third quarter revenue gains from content distribution helped drive a 40% global increase in proprietary online content revenue year-over-year.
“Additionally, we announced today that the Board of Directors has unanimously decided to conclude its review of strategic alternatives for Bragg. After extensive evaluation and deliberation, the Board determined that the ongoing execution of the Company’s strategic plan is the best way to maximize value for shareholders at this time.
“Since stepping in as Chairman 16 months ago and then as CEO 14 months ago, we’ve transformed our executive team, restructured commercial operations, and sharpened our sales strategy with a targeted, jurisdictional approach. These decisive actions position us to drive growth and capture market opportunities with greater precision and impact. Under new leadership, we’ve built a strong pipeline of tier 1 opportunities across key markets and key products, positioning Bragg for accelerated top- and bottom-line growth.
“With the strategic review process now complete, Bragg is now fully focused on commercialization and unlocking profitable growth, without the need for significant new investment in product development. Our decade-long investments in technology and talent, combined with a robust leadership team, have built a scalable platform that uniquely positions us for aggressive growth in 2025 and beyond. With significant operating leverage now within reach, we’re poised for an exciting, high-growth, and profitable future.”
Third Quarter 2024 and Recent Business Highlights
- Launched its newest games and Remote Gaming Server (RGS) technology with Caesars Digital in Pennsylvania and Ontario. The launch marked the expansion of Bragg’s existing partnership with Caesars Digital, following earlier launches in New Jersey and Michigan respectively, doubling the number of states/provinces in which Bragg content is offered on Caesars Palace Online Casino and Caesars Sportsbook & Casino.
- Launched its newest games and RGS technology with FanDuel in New Jersey, adding to its existing distribution with the leading North American operator in Michigan, Pennsylvania, Connecticut and Ontario
- Post-quarter end, the Company additionally launched its newest games and RGS technology with bet365 in New Jersey, following on from its second quarter launch in Pennsylvania, and an earlier launch in Ontario with the major global iGaming operator
- Launched HardRockCasino.nl in the Dutch market, supplying its cutting-edge player account management (PAM) software to the brand. The agreement is Bragg’s 6th PAM customer in the Netherlands, reinforcing Bragg’s status as the leading technology and content supplier in the Dutch market
- Launched the Kambi sportsbook on 711.nl, adding an additional revenue-generating product stream to a key PAM customer in the Netherlands
- Management is pleased to announce the appointment of Robbie Bressler to CFO of Bragg, effective immediately. Robbie had been serving as Bragg’s interim CFO since July 1, 2024.
Additional September 30, 2024 Key Financial Metrics
- For the nine-month period ended September 30, 2024, Cash flow generated from operations was EUR 8.4 million (USD 9.4 million), compared to EUR 6.2 million (USD 6.9 million) for the nine-month period ended September 30, 2023.
- Cash and cash equivalents as of September 30, 2024 was EUR 11.6 million (USD 13.0 million) and net working capital, excluding deferred consideration, loans payable, and convertible debt, was EUR 11.3 million (USD 12.7 million)
Strategic Alternatives Process Concluded
The Bragg Board announced the strategic alternatives process in March 2024 with the formation of a Special Committee, comprised solely of independent members of the Board. The Committee, together with its advisors Oakvale Capital LLP and Blake, Cassels & Graydon LLP, evaluated a wide range of strategic alternatives for maximizing shareholder value including a potential sale or merger of the Company. Bragg solicited interest from a significant number of potential counterparties and received multiple non-binding proposals.
After careful consideration, the Board, on recommendation from the special committee, unanimously determined that none of the proposals received reflect the Company’s intrinsic value or current and projected financial performance, and therefore elected to conclude its review and disband the Special Committee.
Don Robertson, independent Board member and Chair of the Special Committee, said, “After a comprehensive and exhaustive process, the Committee recommended, and the Board unanimously agreed, that continuing to execute Bragg’s strategic plan as an independent public company is the best approach for maximizing shareholder value. Although the process has now concluded, Bragg’s Board will continue to be open to and consider all opportunities for enhancing shareholder value.”
“Over the past year, our financial performance, cashflow generation and revenue outlook have significantly improved. We remain extremely confident about our business plan, operating strategy, and financial prospects” said Matevž Mazij, Chairman and CEO of Bragg.
Reiterates Full Year 2024 Guidance and 2025 Outlook
Bragg reiterates its 2024 full year revenue guidance range of EUR 102.0-109.0 million (USD 114.2-122.1 million) and its full year Adjusted EBITDA range of EUR 15.2-18.5 million (USD 17.0-20.7 million), noting that the Company is currently tracking to the lower end of guidance.
Bragg is actively advancing a robust pipeline of opportunities that is anticipated to drive strong momentum as we enter 2025. The outlook for 2025 remains positive, with expectations of sustained double-digit top line growth, expanding bottom line margins, and increased operational leverage, further strengthening Bragg’s position in the market. The preceding guidance and outlook constitute forward-looking information within the meaning of applicable securities laws, and is based on a number of assumptions and subject to a number of risks.
Bragg is going to attend the Peru Gaming Show taking place at Limas’s Jockey Exhibition Center on the 12-13 of June, 2024.
Recently registered as an approved service provider by the Peruvian Ministry of Foreign Trade and Tourism (MINCETUR), Bragg Gaming Group is now authorized to distribute online casino games, including Bragg’s proprietary and exclusive games portfolio, via the Bragg HUB aggregation platform to operators in the Latin American iGaming market.
“Join us in Lima to discuss future business opportunities with Bragg Gaming Group. Our team will be available to show how our innovative technology, premium content, and comprehensive managed services solutions can elevate your business,” the company said.
As a fully compliant service provider in Peru, Bragg Gaming Group offers local operators tailored solutions to efficiently manage their entire product suite. Bragg’s offerings are designed to meet the unique needs of the Latin American market, ensuring compliance and optimal performance.
Bragg Gaming Group Inc., a global B2B gaming technology and content provider, announced the issuance of a secured promissory note in the principal amount of US$7 million (the “Note”) to certain entities controlled by Doug Fallon, Managing Director of Group Content of the Company and the Founder of Nevada-based Wild Streak Gaming. The Note matures on April 25, 2025 and bears interest at an annual rate of 14%, payable quarterly.
“This financing provides the Company’s balance sheet with additional flexibility as we continue to review strategic alternatives for maximizing shareholder value and execute against our strategy,” said Matevž Mazij, Chief Executive Officer. “We would also like to thank The Lind Partners for their cooperation in providing a waiver consenting to the Note funding”.
“After reporting another consecutive full year of strong revenue, gross profit and Adjusted EBITDA growth in 2023, we are exceptionally well placed to capitalize on our in-demand content, product and technology verticals in major iGaming markets in North America, Europe and LatAm. From our market-leading player account management (“PAM”) platform and turnkey solutions to our unique casino content aggregation offering with Fuze
promotional functionality and player journey management, as well as our ever-growing exclusive content portfolio, our product strategies are refined for each market we operate in.”
The Toronto Stock Exchange (the “TSX”) has conditionally approved the issuance of the Note. The Company may use the net proceeds from the Note for general working capital purposes and strategic initiatives.
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