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Bragg Gaming Group Reports Record First Quarter Results As Revenue Rises 36.4% To €19.4 Million (Usd $20.5 Million)

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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

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“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.

  • 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.

  • 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%.

    • 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.

  • 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.

  • 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.

  • 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.

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Bragg Gaming Continues U.S. Expansion with Golden Nugget in Michigan

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Bragg Gaming Group proudly announces that it has gone live with its newest games and Remote Game Server (RGS) technology at Golden Nugget in Michigan. This milestone marks a significant step in Bragg’s ongoing commitment to delivering innovative and engaging content to players across North America.

Games now available to Golden Nugget’s players in Michigan include popular titles such as “Cai Fu Emperor Ways” and “Egyptian Magic” from Bragg’s Atomic Slot Lab, along with the thrilling “Devil’s Lock” from Bluberi.

All online casino games delivered on Bragg’s new RGS technology come with the Company’s Fuze promotional tools as standard which offer player engagement features on games such as free rounds, tournaments and quests.

H2 Gambling Capital projects an impressive Gross Win of over USD $2 billion for the regulated online casino market in Michigan in 2024, highlighting the tremendous growth potential in the region.

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Kunal Mishra, Chief Operating Officer – Americas, at Bragg Gaming Group, said: “We continue to strengthen our relationships with key iGaming operators in North America, and the expansion with Golden Nugget in Michigan is a testament to our successful strategy. By offering our high-quality, engaging content, we aim to contribute to the long-term growth of our partners and provide an exceptional gaming experience for players.

“This achievement builds on Bragg’s existing collaboration with Golden Nugget, aligning with the company’s vision to deliver cutting-edge gaming solutions to players in the rapidly growing U.S. iGaming market.”

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Bragg

Bragg is attending the SBC Summit Latinoamérica 2023

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Join Bragg’s team at the SBC Summit Latinoamérica 2023, the premier conference and trade show for senior executives in the region. As a trusted industry leader already licensed in Colombia, we are excited to connect with casino and sportsbook operators to discuss exciting opportunities.

Explore our complete suite of iGaming platform technology and casino content as well as our state-of-the-art gamification toolset, Fuze, which works across sports betting and casino products offering unique cross-sell mechanics.

Don’t miss the chance to meet our team at the event from September 19th to 21st in Miami.

Set up a meeting at [email protected]

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¡Espero que nos vemos en Miami muy pronto!

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Bragg is attending the EGR US Power Summit 2023

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On September 14 – 15, 2023, Kunal Mishra, COO Americas, and Doug Fallon, Group Director of Content, will be attending the EGR US Power Summit in California. The yearly meeting of the most powerful and influential North American operators is organized by EGR, one of the key info hubs and news sources on the iGaming industry in the continent.

This exclusive and invitation-only event is a great opportunity to obtain and share experience from the field, network among peers, discover future partners and establish new connections. This year, more than 50 delegates from over 20 North American operators will be engaging in two days of panels, discussions and networking activities with the most prominent figures from the industry.

We are proud sponsors of this year’s Power Summit, as we continue to boost our presence and visibility in North American markets as part of our ongoing drive to strengthen our position in one of the most promising iGaming markets globally.

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