Bragg Gaming Group Second Quarter Revenue Rises 18.9% to Record €24.7 Million (USD $27.2 Million)
- Bragg Gaming Group achieved record financial results in Q2 2023, with revenue of €24.7 million, representing an 18.9% increase compared to the same period last year.
- Gross profit also rose by 18.9% to €13.8 million, with a gross profit margin of 55.9%.
- Adjusted EBITDA grew significantly by 51.3% to €4.7 million, resulting in an Adjusted EBITDA margin of 19.2%, an all-time quarterly record for Bragg.
- The company updated its full-year 2023 guidance, expecting revenue growth of 13% and Adjusted EBITDA growth of 32% over the previous year.
- None.
Gross Profit Rises
Updates Full Year 2023 Guidance Ranges with Midpoints Implying Revenue Growth of
Summary of 2Q23 Financial and Operational Highlights
Euros (millions)(1) |
|
2Q23 |
|
2Q22 |
|
Change |
|
||
Revenue |
|
€ |
24.7 |
|
€ |
20.8 |
|
18.9 |
% |
Gross profit |
|
€ |
13.8 |
|
€ |
11.6 |
|
18.9 |
% |
Gross profit margin |
|
|
55.9 |
% |
|
55.9 |
% |
0 |
bps |
Adjusted EBITDA(2) |
|
€ |
4.7 |
|
€ |
3.1 |
|
51.3 |
% |
Adjusted EBITDA margin |
|
|
19.2 |
% |
|
15.1 |
% |
410 |
bps |
Wagering revenue |
|
€ |
5.5 |
B |
€ |
4.2 |
B |
31.2 |
% |
(1) |
Bragg’s reporting currency is Euros. The exchange rate provided is EUR |
(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
“Bragg’s initiatives to focus the business to be a leading content-driven iGaming B2B provider combined with disciplined expense management, resulted in record second quarter operating results,” said Yaniv Sherman, Chief Executive Officer for Bragg. “Second quarter revenue and gross profit both rose nearly
“During the second quarter we further advanced our efforts to scale the global distribution of our proprietary and exclusive third-party content. We continue to grow our distribution in
Mr. Sherman concluded, “With significant and ongoing progress on our key strategic initiatives Bragg is positioned to deliver further year over year revenue and cash flow growth in the second half of 2023 and beyond. Our balance sheet and strong cash flow has us well capitalized to execute on our growth initiatives. We are confident we have the right strategies and infrastructure in place to continue fortifying our position as a leading B2B iGaming content provider and that our business momentum will create new value for our shareholders.”
Second Quarter 2023 and Recent Business Highlights
-
New content and RGS technology went live with Rush Street Interactive in
Pennsylvania , with FanDuel inMichigan andConnecticut , and with WynnBet inNew Jersey -
Entered into new global distribution agreements with Tier 1 operators 888 Holdings and PokerStars (Flutter)
-
These agreements will expand the reach of Bragg’s content in leading European markets such as the
UK ,Italy ,Portugal ,Spain ,Denmark ,Sweden and in theU.S. inNew Jersey ,Michigan andPennsylvania
-
These agreements will expand the reach of Bragg’s content in leading European markets such as the
-
Launched for the first time in the Eurasian territory of
Georgia with Adjarabet -
Expanded
Switzerland andSpain reach with six new customers -
Since April 1, 2023, the Company has made four monthly cash payments to Lind Global Fund II LP (Lind”) in the aggregate amount of USD
$2.0 million $6.0 million - Bragg expects to utilize cash flow from operations to make similar monthly cash payments to further reduce the Lind convertible security
Second Quarter 2023 Financial Results and other Key Metrics Highlights
-
Revenue increased by
18.9% to€24.7 million (USD$27.2 million €20.8 million (USD$22.9 million -
Wagering revenue generated by games and content offered by the Company increased by
31.2% to€5.5 billion (USD$6.1 billion €4.2 billion (USD$4.6 billion -
Gross profit increased by
18.9% to€13.8 million (USD$15.2 million €11.6 million (USD$12.8 million 55.9% -
Net income for the period was
€0.4 million (USD$0.4 million €0.1 million (USD$0.1 million -
Adjusted EBITDA increased by
51.3% to€4.7 million (USD$5.2 million €3.1 million (USD$3.4 million 19.2% compared to15.1% in 2Q22 -
For the six-month period ended June 30, 2023, total cash flow from operations was
€5.2 million (USD$ 5.7 million €7.6 million (USD$ 8.4 million -
Cash and cash equivalents as of June 30, 2023, was
€10.7 million (USD$11.8 million €8.3 million (USD$9.1 million
Updates Full Year 2023 Guidance
Reflecting the business momentum through the first half of the year as well as ongoing discussions in regard to optimizing key customer partnerships for the long-term, Bragg today updated its 2023 full year revenue guidance range to
Investor Conference Call
The Company will host a conference call today, August 10, 2023, at 8:30 a.m. Eastern Time, to discuss its second quarter 2023 results. During the call, management will review a presentation that will be made available to download at https://investors.bragg.group/financials/quarterly-results/default.aspx.
To join the call, please use the below dial-in information:
Participant Toll-Free Dial-In Number (US/
Participant Toll Dial-In Number (INTERNATIONAL): (646) 960-0341
Conference ID: 2522980
A webcast of the call and presentation may also be viewed at: https://investors.bragg.group/events-and-presentations/events/default.aspx
A replay of the call will be available until August 17, 2023 following the conclusion of the live call. In order to access the replay, dial (647) 362-9199 or (800) 770-2030 (toll-free) and use the passcode 2522980.
Cautionary Statement Regarding Forward-Looking Information
This news release may contain forward-looking statements or “forward-looking information” within the meaning of applicable Canadian securities laws (“forward-looking statements”), including, without limitation, statements with respect to the following: the Company’s strategic growth initiatives and corporate vision and strategy; financial guidance for 2023, expected performance of the Company’s business; expansion into new markets; the impact of the new German regulatory regime, expected future growth and expansion opportunities; expected benefits of transactions; expected future actions and decisions of regulators and the timing and impact thereof. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the future and allowing readers to get a better understanding of the Company’s anticipated financial position, results of operations, and operating environment. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or describes a “goal”, or variation of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
All forward-looking statements reflect the Company’s beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. All of the Company’s forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions listed below. Although the Company believes that these assumptions are reasonable, this list is not exhaustive of factors that may affect any of the forward-looking statements. The key assumptions that have been made in connection with the forward-looking statements include the following: the impact of any public health measures on the business of the Company; the regulatory regime governing the business of the Company; the operations of the Company; the products and services of the Company; the Company’s customers; the growth of Company’s business, the meeting minimum listing requirements of the stock exchanges on which the Company's shares trade; which may not be achieved or realized within the time frames stated or at all; the integration of technology; and the anticipated size and/or revenue associated with the gaming market globally.
Forward-looking statements involve known and unknown risks, future events, conditions, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, prediction, projection, forecast, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the following: risks related to the Company’s business and financial position; that the Company may not be able to accurately predict its rate of growth and profitability; risks associated with general economic conditions; adverse industry events; future legislative and regulatory developments; the inability to access sufficient capital from internal and external sources; the inability to access sufficient capital on favorable terms; realization of growth estimates, income tax and regulatory matters; the ability of the Company to implement its business strategies; competition; economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices; changes in customer demand; disruptions to our technology network including computer systems and software; natural events such as severe weather, fires, floods and earthquakes; and risks related to health pandemics and the outbreak of communicable diseases. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.
The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise, except in accordance with applicable securities laws.
Non-IFRS Financial Measures
Statements in this news release make reference to “Adjusted EBITDA”, which is a non-IFRS (as defined herein) financial measure that the Company believes is appropriate to provide meaningful comparison with, and to enhance an overall understanding of, the Company’s past financial performance and prospects for the future. The Company believes that “Adjusted EBITDA” provides useful information to both management and investors by excluding specific expenses and items that management believe are not indicative of the Company’s core operating results. “Adjusted EBITDA” is a financial measure that does not have a standardized meaning under International Financial Reporting Standards (“IFRS”). As there is no standardized method of calculating “Adjusted EBITDA”, it may not be directly comparable with similarly titled measures used by other companies. The Company considers “Adjusted EBITDA” to be a relevant indicator for measuring trends in performance and its ability to generate funds to service its debt and to meet its future working capital and capital expenditure requirements. “Adjusted EBITDA” is not a generally accepted earnings measure and should not be considered in isolation or as an alternative to net income (loss), cash flows or other measures of performance prepared in accordance with IFRS. Adjusted EBITDA is more fully defined and discussed, and reconciliation to IFRS financial measures is provided, in Company’s Management’s Discussion and Analysis (“MD&A”) for the three and six-month period ended June 30, 2023.
About Bragg Gaming Group
Bragg Gaming Group (NASDAQ: BRAG, TSX: BRAG) is a content-driven iGaming technology provider, serving online and land-based gaming operators with its proprietary and exclusive content, and its cutting-edge technology. Bragg Studios offer high-performing, data-driven and passionately crafted casino gaming titles from in-house brands Wild Streak Gaming, Spin Games, Atomic Slot Lab, Indigo Magic and Oryx Gaming. Its proprietary content portfolio is complemented by a range of exclusive titles from carefully selected studio partners which are Powered By Bragg: games built on Bragg remote games server (Bragg RGS) technology, distributed via the Bragg Hub content delivery platform and available exclusively to Bragg’s customers. Bragg’s modern and flexible omnichannel Player Account Management (Bragg PAM) platform powers multiple leading iCasino and sportsbook brands and is supported by expert in-house managed operational and marketing services. All content delivered via the Bragg Hub, whether exclusive or from Bragg’s large, aggregated games portfolio, is managed from a single back-office and is supported by powerful data analytics tools, as well as Bragg’s Fuze™ player engagement toolset. Bragg is licensed or otherwise certified, approved and operational in multiple regulated iCasino markets globally, including in
Financial tables follow
BRAGG GAMING GROUP INC.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE (LOSS) INCOME
(In thousands, except per share amounts)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
|
|
24,729 |
|
|
|
20,794 |
|
|
|
47,588 |
|
|
|
40,154 |
|
Cost of revenue |
|
|
(10,903 |
) |
|
|
(9,167 |
) |
|
|
(21,542 |
) |
|
|
(18,507 |
) |
Gross Profit |
|
|
13,826 |
|
|
|
11,627 |
|
|
|
26,046 |
|
|
|
21,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
(13,082 |
) |
|
|
(11,305 |
) |
|
|
(24,988 |
) |
|
|
(21,505 |
) |
Loss on remeasurement of derivative liability |
|
|
(115 |
) |
|
|
— |
|
|
|
(179 |
) |
|
|
— |
|
Gain on settlement of convertible debt |
|
|
204 |
|
|
|
— |
|
|
|
204 |
|
|
|
— |
|
Gain on remeasurement of consideration receivable |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
37 |
|
Gain on remeasurement of deferred consideration |
|
|
438 |
|
|
|
469 |
|
|
|
708 |
|
|
|
469 |
|
Operating Income |
|
|
1,271 |
|
|
|
791 |
|
|
|
1,791 |
|
|
|
648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net interest expense and other financing charges |
|
|
(368 |
) |
|
|
(126 |
) |
|
|
(964 |
) |
|
|
(278 |
) |
Profit Before Income Taxes |
|
|
903 |
|
|
|
665 |
|
|
|
827 |
|
|
|
370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income taxes |
|
|
(526 |
) |
|
|
(575 |
) |
|
|
(926 |
) |
|
|
(1,000 |
) |
Net Income (Loss) |
|
|
377 |
|
|
|
90 |
|
|
|
(99 |
) |
|
|
(630 |
) |
Items to be reclassified to net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cumulative translation adjustment |
|
|
(585 |
) |
|
|
1,601 |
|
|
|
(1,143 |
) |
|
|
(1,143 |
) |
Net Comprehensive (Loss) Income |
|
|
(208 |
) |
|
|
1,691 |
|
|
|
(1,242 |
) |
|
|
(1,773 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic Income (Loss) Per Share |
|
|
0.02 |
|
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
(0.03 |
) |
Diluted Income (Loss) Per Share |
|
|
0.02 |
|
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Millions |
|
|
Millions |
|
|
Millions |
|
|
Millions |
||||
Weighted average number of shares - basic |
|
|
22.3 |
|
|
|
21.0 |
|
|
|
22.0 |
|
|
|
20.9 |
|
Weighted average number of shares - diluted |
|
|
23.6 |
|
|
|
21.8 |
|
|
|
23.3 |
|
|
|
20.9 |
|
BRAGG GAMING GROUP INC.
INTERIM UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(in thousands)
|
|
As at |
|
As at |
||||
|
|
June 30, |
|
December 31, |
||||
|
|
2023 |
|
2022 |
||||
Cash and cash equivalents |
|
|
10,742 |
|
|
|
11,287 |
|
Trade and other receivables |
|
|
16,515 |
|
|
|
16,628 |
|
Prepaid expenses and other assets |
|
|
3,387 |
|
|
|
1,823 |
|
Total Current Assets |
|
|
30,644 |
|
|
|
29,738 |
|
Property and equipment |
|
|
692 |
|
|
|
660 |
|
Right-of-use assets |
|
|
1,242 |
|
|
|
576 |
|
Intangible assets |
|
|
39,520 |
|
|
|
41,705 |
|
Goodwill |
|
|
31,662 |
|
|
|
31,662 |
|
Other assets |
|
|
47 |
|
|
|
47 |
|
Total Assets |
|
|
103,807 |
|
|
|
104,388 |
|
|
|
|
|
|
|
|
||
Trade payables and other liabilities |
|
|
19,337 |
|
|
|
19,549 |
|
Deferred revenue |
|
|
408 |
|
|
|
746 |
|
Income taxes payable |
|
|
1,229 |
|
|
|
1,113 |
|
Lease obligations on right of use assets - current |
|
|
342 |
|
|
|
294 |
|
Deferred consideration - current |
|
|
899 |
|
|
|
1,176 |
|
Derivative liability - current |
|
|
1,006 |
|
|
|
1,320 |
|
Loans payable |
|
|
— |
|
|
|
109 |
|
Total Current Liabilities |
|
|
23,221 |
|
|
|
24,307 |
|
Deferred income tax liabilities |
|
|
1,201 |
|
|
|
1,201 |
|
Lease obligations on right of use assets - non-current |
|
|
973 |
|
|
|
344 |
|
Convertible debt |
|
|
4,532 |
|
|
|
6,648 |
|
Deferred consideration - non-current |
|
|
836 |
|
|
|
2,121 |
|
Other non-current liabilities |
|
|
233 |
|
|
|
233 |
|
Total Liabilities |
|
|
30,996 |
|
|
|
34,854 |
|
|
|
|
|
|
|
|
||
Share capital |
|
|
117,061 |
|
|
|
109,902 |
|
Broker warrants |
|
|
38 |
|
|
|
38 |
|
Shares to be issued |
|
|
3,491 |
|
|
|
6,982 |
|
Contributed surplus |
|
|
21,596 |
|
|
|
20,745 |
|
Accumulated deficit |
|
|
(72,326 |
) |
|
|
(72,227 |
) |
Accumulated other comprehensive income |
|
|
2,951 |
|
|
|
4,094 |
|
Total Equity |
|
|
72,811 |
|
|
|
69,534 |
|
Total Liabilities and Equity |
|
|
103,807 |
|
|
|
104,388 |
|
BRAGG GAMING GROUP INC.
UNAUDITED SELECTED FINANCIAL GAAP AND NON-GAAP MEASURES
(in thousands)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Revenue |
|
24,729 |
|
20,794 |
|
47,588 |
|
40,154 |
Operating income |
|
1,271 |
|
791 |
|
1,791 |
|
648 |
EBITDA |
|
4,525 |
|
2,674 |
|
7,754 |
|
4,107 |
Adjusted EBITDA |
|
4,742 |
|
3,135 |
|
8,636 |
|
6,175 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230810152084/en/
Yaniv Spielberg
Chief Strategy Officer
Bragg Gaming Group
info@bragg.games
Joseph Jaffoni, Richard Land, James Leahy
JCIR
212-835-8500 or bragg@jcir.com
Source: Bragg Gaming Group
FAQ
What were Bragg Gaming Group's revenue and gross profit for Q2 2023?
How much did Adjusted EBITDA grow in Q2 2023?
What is Bragg Gaming Group's updated full-year 2023 guidance?
