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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 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.

  • 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.

Canada

AGCO Fines Great Canadian Casino Resort Toronto $350,000 for Serious Regulatory Violations Linked to Impromptu After-Party on Gaming Floor

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The Alcohol and Gaming Commission of Ontario (AGCO) has issued monetary penalties totaling $350,000 against Great Canadian Casino Resort Toronto for multiple violations of provincial gaming standards. The penalties follow an impromptu after-party that was permitted to take place in the pre-dawn hours directly on the casino’s gaming floor.

On September 27, 2024, an electronic dance music event attended by thousands of people was hosted in the theatre adjacent to the casino at Great Canadian Casino Resort Toronto. The event was marked by widespread intoxication, disorderly behavior, and numerous criminal and medical incidents – both inside and outside the venue – including alleged assaults, drug overdoses, and acts of public indecency. Although paid duty officers were present, additional police and emergency services were required to manage the situation.

In the midst of this high-risk environment, casino management approved an unscheduled request by the performing artist to host an after-party on the active gaming floor. The artist and more than 400 guests were permitted onto the gaming floor where the artist was allowed to perform amidst operational table games and gaming machines – without any prior risk assessment or planning.

As a result, security personnel were unable to effectively control the casino floor, including witness reports that an attendee was seen climbing onto slot machines. Failure to maintain appropriate control compromises the security, safety, and integrity of the casino floor. Following the conclusion of the event, the operator failed to promptly report these incidents to the AGCO as required.

Based on the findings of its review, the AGCO’s Registrar has issued an Order of Monetary Penalty (OMP) totaling $350,000 against Great Canadian Casino Resort Toronto. These penalties address critical failures in their operations, incident reporting, employee training, and the management of disturbances.

A gaming operator served with an OMP has 15 days to appeal the Registrar’s decision to the Licence Appeal Tribunal (LAT), an adjudicative tribunal that is part of Tribunals Ontario and independent of the AGCO.

“Casino operators have a fundamental duty to control their gaming environment. Great Canadian Casino Resort Toronto’s lapses in this incident compromised the safety of patrons and the security and integrity of the gaming floor,” Dr. Karin Schnarr, Chief Executive Officer and Registrar of AGCO, said.

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Canada

IGT and Atlantic Lottery Sign Eight-Year Video Lottery Central System Technology Agreement

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International Game Technology PLC announced that its subsidiary, IGT Canada Solutions ULC (hereinafter “IGT”), signed an eight-year agreement with Atlantic Lottery to supply its IntelligenEVO video lottery central system technology across Atlantic Canada. The agreement includes the option for multiple extensions and positions the Atlantic Lottery to become the first World Lottery Association (WLA)-affiliated lottery operator to deploy IGT’s next-generation central management system in a game-to-system (G2S) distributed market.

“By leveraging IGT’s IntelligenEVO technology, Atlantic Lottery will power its video lottery network with the industry’s best-in-class central system and position itself to maximize future contributions to good causes. As an organization that prioritizes system security and exceptional player experiences, Atlantic Lottery believes that IGT’s IntelliegnEVO solution will help generate high player satisfaction and optimal network performance,” said Michael MacKinnon, Atlantic Lottery VP, Product.

“As a long-time supplier to Atlantic Lottery, IGT looks forward to helping the Lottery achieve its growth and player engagement goals with our leading-edge IntelligenEVO video lottery central system. IGT’s IntelligenEVO is a scalable technology for the WLA market that is backed by decades of experience and operator feedback, and maximizes the benefits of real-time data, cloud-based technologies and in-depth analytics,” said David Flinn, IGT SVP Canada, EMEA and LATAM, Gaming Sales.

With peak system security, network availability and responsible gaming functionalities, IntelligenEVO is a reliable, scalable solution that can meet the needs of today and in the future. The solution will accelerate time-to-market and enables the Atlantic Lottery to benefit from the system’s suite of player-focused functionality. The technology’s G2S and open API design optimizes data collection and delivery and will enable Atlantic Lottery to customize their program for evolving player needs.

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Canada

NetGaming Goes Live in Ontario with Rush Street Interactive via BetRivers Platform

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Pallavi Deshmukh, CEO of NetGaming

 

NetGaming, a fast-growing online casino content supplier, is proud to announce its launch in Ontario with Rush Street Interactive, Inc., a leading online casino and sports betting company in the United States, Canada and Latin America. This strategic collaboration marks a significant milestone for NetGaming as it continues to expand its footprint across regulated North American markets.

As part of the launch, Ontario players on BetRivers can now enjoy a diverse portfolio of NetGaming titles, known for their high-quality graphics, immersive gameplay, and unique themes. Standout games such as Zeus’s Thunderbolt, Bison Gold, and Fireball Inferno are among the first to go live, with additional titles set to follow soon.

This partnership is just the beginning. NetGaming plans to extend its collaboration with Rush Street Interactive into Michigan, New Jersey, Pennsylvania, Delaware, and Mexico over the coming months.

Pallavi Deshmukh, CEO of NetGaming, commented: “We are thrilled to go live with Rush Street Interactive, a powerhouse operator with a strong presence and loyal player base. This launch marks a significant milestone in our
North American expansion strategy and underscores our commitment to delivering exceptional gaming experiences tailored to local player preferences across the region.”

Richard Schwartz, CEO of Rush Street Interactive, commented: “We are pleased to partner with NetGaming to bring innovative, premium games to our players in Ontario. This collaboration aligns with our strategy to offer world-class
entertainment through engaging, action-packed online casino games. We look forward to expanding this partnership into additional regulated markets in the months ahead.”

This strategic partnership highlights both companies’ dedication to providing high- quality, innovative, and responsible entertainment to players in regulated markets.

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