GAN Reports First Quarter 2021 Financial Results

Rhea-AI Summary

GAN Limited (NASDAQ: GAN) reported strong financial results for Q1 2021, with total revenues soaring to $27.8 million, a remarkable 263% increase year-over-year. This growth was fueled by a $14.3 million contribution from the Coolbet acquisition, alongside a 76% rise in B2B revenues. However, the company faced a net loss of $4.5 million due to increased costs associated with the acquisition and ongoing operational expenses. As of March 31, 2021, GAN held $52.2 million in cash, down from $152.7 million at year-end 2020.

Positive

• 263% increase in total revenues to $27.8 million.
• $14.3 million contribution from Coolbet acquisition.
• B2B revenues increased by 76% to $13.5 million.
• Strong performance in new market launches, exceeding 2020's total.
• Exclusive content deal with Ainsworth to enhance market offering.

Negative

• Net loss of $4.5 million compared to net income of $0.7 million.
• Increased amortization and operational costs due to Coolbet integration.
• Adjusted EBITDA decreased to $1.7 million from $2.5 million.
• Cash reserves decreased significantly from $152.7 million to $52.2 million.

GAN Limited (the “Company” or “GAN”) (NASDAQ: GAN), a leading full-service Internet gaming software-as-a-service provider to the real money internet gaming, online sports betting, and simulated gaming industries, today announced its operating and financial results for the first quarter ended March 31, 2021.

Dermot Smurfit, CEO stated:

“We started the new year on a strong note with 263% top-line growth year-over-year, fueled by both organic growth as well as the Coolbet acquisition. We completed a record five RMiG partner launches during the first quarter, highlighted by our groundbreaking launch and strong results in Michigan, plus our exciting new partnerships with Wynn and Churchill Downs. We carried that momentum into the second quarter, with now 10 launches year-to-date, exceeding all of 2020. Most notably, we completed a successful multi-faceted transition onto our platform for Churchill Downs’ TwinSpires branded sports betting and iGaming across five states leveraging our scarce multi-State ‘One Account, Any Product, Any State’ technical capability. Additionally, we secured a long-term exclusive content deal with Ainsworth to further enhance our market offering. This key partnership will increase the Company’s overall ‘take rate’ on Gross Operator Revenue from iGaming, and help us secure a fast-growing share of existing iGaming revenues from B2C Operators who are not already partners of GAN. Looking ahead, our pipeline continues to expand with new opportunities for our industry-leading B2B offering here in the U.S. Lastly, we are thrilled with Coolbet’s strong contribution this quarter and how seamlessly we’ve been able to integrate the team. Coolbet offers a dual growth platform with our anticipated launch of their B2B sportsbook engine in the U.S. later this year and its exciting B2C international growth opportunity.”

First Quarter 2021 vs First Quarter 2020 Financial Highlights:

• Total revenues of $27.8 million versus $7.7 million, a 263% increase driven by the $14.3 million contribution from Coolbet to our Business-to-Consumer (“B2C”) segment and growth of $5.8 million from our Business-to-Business (“B2B”) segment.
• Closed acquisition of Coolbet sports betting technology and operations in early January 2021, continuing the development of their sports betting technology for U.S. deployment.
• GAN’s business has grown to two segments: (1) B2B – which includes Real money Internet gaming (“RMiG”) and Simulated gaming (“SIM”), and (2) B2C – which includes Coolbet's assets and international operations.
• B2B segment revenues up 76% to $13.5 million, driven by a RMiG increase of 68% to $10.5 million and a SIM increase of 114% to $3.0 million.
• B2C segment revenues of $14.3 million, derived from Coolbet’s existing and proven international sports betting and casino gaming operations. Key performance indicators remain at exceptional levels.
• Segment gross profit of $19.1 million versus $6.0 million. The 220% increase was driven by an $8.3 million contribution from the acquisition of Coolbet to our B2C segment, plus strong organic growth and new customer launches within our B2B segment.
• Net loss of $4.5 million versus net income of $0.7 million, driven primarily by increased amortization related to acquired intangibles from the Coolbet acquisition ($2.9 million), increased share-based compensation ($1.2 million), and operating expenses related to marketing, organizational expansion to meet market and customer demand, and costs related to regulatory requirements.
• Adjusted EBITDA of $1.7 million versus $2.5 million. The decrease in Adjusted EBITDA was driven by increased operating costs in the current year related to regulatory requirements and organizational expansion to meet market and customer demand.
• Cash of $52.2 million at March 31, 2021 compared to $152.7 million at December 31, 2020. The decrease is driven primarily by the cash paid to acquire Coolbet, net of cash acquired ($92.4 million), in January 2021.

GAN Limited
Key Financial Highlights
(Unaudited, in thousands unless otherwise specified)
		Three Months Ended March 31,
		2021				2020
Revenues
B2B

FAQ

What were GAN's financial results for Q1 2021?

GAN reported total revenues of $27.8 million for Q1 2021, marking a 263% increase year-over-year.

How did the Coolbet acquisition impact GAN's revenue?

The Coolbet acquisition contributed $14.3 million to GAN's B2C segment revenues in Q1 2021.

What is GAN's net loss for Q1 2021?

GAN reported a net loss of $4.5 million in Q1 2021, driven by increased acquisition-related costs.

What are GAN's cash reserves as of March 31, 2021?

GAN's cash reserves stood at $52.2 million as of March 31, 2021, down from $152.7 million at the end of 2020.

How much did GAN's B2B revenues increase in Q1 2021?

GAN's B2B revenues increased by 76% in Q1 2021, reaching $13.5 million.