Canada
Gambling.com Group Reports Second Quarter 2022 Financial Results
Gambling.com Group Limited (Nasdaq: GAMB) (“Gambling.com Group” or the “Company”), a multi-award-winning performance marketing company and a leading provider of digital marketing services active in the global online gambling industry, today announced its operating and financial results for the second quarter ended June 30, 2022.
“We continued to execute on our strategy of rapidly growing our business in North America in the second quarter as the team delivered company-wide revenue growth of over 50% and North American revenue growth over 300%,” said Charles Gillespie, Chief Executive Officer and Co-founder of Gambling.com Group. “The strength of our business model was also on display, as we continued to deliver strong Adjusted EBITDA and Free Cash Flow despite the second quarter being the seasonally weakest and while investing in the organization to drive future growth. Our view remains that Gambling.com Group offers the best value proposition for online gambling operators’ investments in customer acquisition and we look forward to the second half of the year as we enter the heart of the North American fall and winter sports calendars.”
Second Quarter 2022 vs. Second Quarter 2021 Financial Highlights
(in thousands, USD, except per share data, unaudited)
|
|
 Three Months Ended June 30, |
|
CHANGE |
||||||||
|
|
2022 |
|
2021 |
|
$ |
|
% |
||||
|
Revenue |
15,924 |
|
|
10,392 |
|
|
5,532 |
|
|
53 |
% |
|
Net income for the period attributable to the shareholders |
56 |
|
|
2,445 |
|
|
(2,389 |
) |
|
(98 |
)% |
|
Net income per share attributable to shareholders, diluted |
0.00 |
|
|
0.08 |
|
|
(0.08 |
) |
|
(100 |
)% |
|
Adjusted net income for the period attributable to shareholders |
3,065 |
|
|
2,445 |
|
|
620 |
|
|
25 |
% |
|
Adjusted net income per share attributable to shareholders, diluted |
0.09 |
|
|
0.08 |
|
|
0.01 |
|
|
9 |
% |
|
Adjusted EBITDA |
3,617 |
|
|
5,518 |
|
|
(1,901 |
) |
|
(34 |
)% |
Adjusted EBITDA Margin |
23 |
% |
|
53 |
% |
|
|
|
(30 |
)% |
|
|
Cash flow from operations |
3,460 |
|
|
4,738 |
|
|
(1,278 |
) |
|
(27 |
)% |
|
Free Cash Flow |
2,914 |
|
|
3,122 |
|
|
(208 |
) |
|
(7 |
)% |
Second Quarter 2022 Business Highlights
- North American revenue grew 342% to $6.2 million
- Delivered more than 57,000 new depositing customers
- Successful new market launch in Ontario
- Added Michael Quartieri to the Board of Directors, effective as of June 30, 2022
- Inclusion of GAMB shares in the Russell 3000 index and various sub-indexes
- Contribution from BonusFinder.com is ahead of plan
Elias Mark, Chief Financial Officer of Gambling.com Group, added, “We delivered revenue and Adjusted EBITDA ahead of the street consensus and generated strong Free Cash Flow in the quarter. Revenue growth continued to be led by growth in North America in line with our strategic objectives, but we also saw strong trading in our more mature markets in the UK and Ireland despite the weakening of the GBP and EUR against the US dollar. Integration of our acquisitions from Q1 is tracking according to plan. The Company remains well capitalized and in a strong position to meet the financial outlook for the year and to continue to grow profitably beyond.”
2022 Outlook
For the fiscal year 2022, based on currently available information, the Company reiterates its fiscal 2022 guidance and estimates:
- Total revenue will be in the range of $71 million and $76 million; and
- Adjusted EBITDA will be in the range $22 million and $27 million.
Conference Call Details
|
Date/Time: |
Monday, August 29, 2022, at 4:30 pm EDT |
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|
Webcast: |
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|
U.S. Toll-Free Dial In: |
877-407-0890 |
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|
International Dial In: |
+1-201-389-0918 |
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To access, please dial in approximately 10 minutes before the start of the call. An accompanying slide presentation will be available in PDF format within the News & Events section of the Company’s website.
An archived webcast of the conference call will also be available in the News & Events section of the Company’s website at gambling.com/corporate/investors/news-events.
About Gambling.com Group Limited
Gambling.com Group Limited (Nasdaq: GAMB) is a multi-award-winning performance marketing company and a leading provider of digital marketing services active in the online gambling industry. Founded in 2006, the Group operates from offices in the United States, Ireland and Malta. Through its proprietary technology platform, the Group publishes a portfolio of premier branded websites including Gambling.com, Bookies.com and RotoWire.com. As of July 31, 2022, the Group owns and operates more than 50 websites in seven languages across 15 national markets covering all aspects of the online gambling industry, including iGaming and sports betting, and the fantasy sports industry.
Use of Non-IFRS Measures
This release contains certain non-IFRS financial measures, such as Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and related ratios. See ”Supplemental Information – Non-IFRS Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that relate to our current expectations and views of future events. All statements other than statements of historical facts contained in this press release, including statements relating to our 2022 outlook, are all forward-looking statements. These statements represent our opinions, expectations, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. In some cases, you can identify forward-looking statements by terms such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” “could,” “will,” “would,” “ongoing,” “future” or the negative of these terms or other similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements involve known and unknown risks, uncertainties, contingencies, changes in circumstances that are difficult to predict and other important factors that may cause our actual results, performance or achievements to be materially and/or significantly different from any future results, performance or achievements expressed or implied by the forward-looking statement. Important factors that could cause actual results to differ materially from our expectations are discussed under “Item 3. Key Information – Risk Factors” in Gambling.com Group’s annual report filed on Form 20-F for the year ended December 31, 2021 with the US Securities and Exchange Commission (the “SEC”) on March 25, 2022, and Gambling.com Group’s other filings with the SEC as such factors may be updated from time to time. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Gambling.com Group disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.
|
|
|||||||||||
|
Condensed Consolidated Statements of Comprehensive Income (Unaudited) |
|||||||||||
|
|
|
|
|
||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
|
|
|
|
|
|
|
|
||||
|
Revenue |
15,924 |
|
|
10,392 |
|
|
35,509 |
|
|
21,909 |
|
|
Cost of sales |
(495 |
) |
|
— |
|
|
(1,724 |
) |
|
— |
|
|
Gross profit |
15,429 |
|
|
10,392 |
|
|
33,785 |
|
|
21,909 |
|
|
Sales and marketing expenses |
(8,454 |
) |
|
(3,144 |
) |
|
(15,816 |
) |
|
(5,848 |
) |
|
Technology expenses |
(1,499 |
) |
|
(944 |
) |
|
(2,862 |
) |
|
(1,634 |
) |
|
General and administrative expenses |
(4,804 |
) |
|
(3,387 |
) |
|
(9,632 |
) |
|
(6,159 |
) |
Fair value movement on contingent consideration |
(2,849 |
) |
|
— |
|
|
(2,849 |
) |
|
— |
|
|
Movements in credit losses allowance and write-offs |
(72 |
) |
|
240 |
|
|
(597 |
) |
|
100 |
|
|
Operating profit (loss) |
(2,249 |
) |
|
3,157 |
|
|
2,029 |
|
|
8,368 |
|
|
Finance income |
3,491 |
|
|
394 |
|
|
4,319 |
|
|
552 |
|
Finance expense |
(1,056 |
) |
|
(524 |
) |
|
(1,307 |
) |
|
(761 |
) |
|
Income before tax |
186 |
|
|
3,027 |
|
|
5,041 |
|
|
8,159 |
|
|
Income tax charge |
(130 |
) |
|
(582 |
) |
|
(499 |
) |
|
(1,248 |
) |
|
Net income for the period attributable to the shareholders |
56 |
|
|
2,445 |
|
|
4,542 |
|
|
6,911 |
|
|
Other comprehensive (loss) income |
|
|
|
|
|
|
|
||||
|
Exchange differences on translating foreign currencies |
(6,559 |
) |
|
490 |
|
|
(7,928 |
) |
|
(1,202 |
) |
|
Total comprehensive (loss) income for the period attributable to the shareholders |
(6,503 |
) |
|
2,935 |
|
|
(3,386 |
) |
|
5,709 |
|
|
Net income per share attributable to shareholders, basic |
0.00 |
|
|
0.09 |
|
|
0.13 |
|
|
0.24 |
|
|
Net income per share attributable to shareholders, diluted |
0.00 |
|
|
0.08 |
|
|
0.13 |
|
|
0.22 |
|
|
Condensed Consolidated Statements of Financial Position (Unaudited) |
|||||
|
|||||
|
|
JUNE 30, 2022 |
|
DECEMBER 31, 2021 |
||
|
ASSETS |
|
|
|
||
|
Non-current assets |
|
|
|
||
|
Property and equipment |
644 |
|
|
569 |
|
|
Intangible assets |
83,076 |
|
|
25,419 |
|
|
Right-of-use assets |
1,896 |
|
|
1,465 |
|
|
Other non-current assets |
40 |
|
|
— |
|
Deferred tax asset |
6,104 |
|
|
7,028 |
|
|
Total non-current assets |
91,760 |
|
|
34,481 |
|
|
Current assets |
|
|
|
||
|
Trade and other receivables |
8,956 |
|
|
5,497 |
|
|
Cash and cash equivalents |
31,102 |
|
|
51,047 |
|
|
Total current assets |
40,058 |
|
|
56,544 |
|
|
Total assets |
131,818 |
|
|
91,025 |
|
|
EQUITY AND LIABILITIES |
|
|
|
||
|
Equity |
|
|
|
||
|
Share capital |
— |
|
|
— |
|
|
Capital reserve |
63,711 |
|
|
55,953 |
|
|
Share options and warrants reserve |
2,901 |
|
|
2,442 |
|
|
Foreign exchange translation reserve |
(10,210 |
) |
|
(2,282 |
) |
|
Retained earnings |
28,550 |
|
|
23,796 |
|
|
Total equity |
84,952 |
|
|
79,909 |
|
|
Non-current liabilities |
|
|
|
||
|
Deferred consideration |
4,664 |
|
|
— |
|
|
Contingent consideration |
9,540 |
|
|
— |
|
|
Lease liability |
1,702 |
|
|
1,286 |
|
|
Deferred tax liability |
3,584 |
|
|
— |
|
|
Total non-current liabilities |
19,490 |
|
|
1,286 |
|
|
Current liabilities |
|
|
|
||
|
Trade and other payables |
5,343 |
|
|
3,291 |
|
|
Deferred consideration |
2,745 |
|
|
— |
|
|
Contingent consideration |
12,218 |
|
|
— |
|
|
Other liability |
165 |
|
|
— |
|
Borrowings |
6,107 |
|
|
5,944 |
|
|
Lease liability |
420 |
|
|
393 |
|
|
Income tax payable |
378 |
|
|
202 |
|
|
Total current liabilities |
27,376 |
|
|
9,830 |
|
|
Total liabilities |
46,866 |
|
|
11,116 |
|
|
Total equity and liabilities |
131,818 |
|
|
91,025 |
|
|
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||||||
|
|||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||
|
|
|
|
|
|
|
|
|
||||
|
Cash flow from operating activities |
|
|
|
|
|
|
|
||||
|
Income before tax |
186 |
|
|
3,027 |
|
|
5,041 |
|
|
8,159 |
|
|
Finance expenses (income), net |
(2,435 |
) |
|
130 |
|
|
(3,012 |
) |
|
209 |
|
|
Adjustments for non-cash items: |
|
|
|
|
|
|
|
||||
|
Depreciation and amortization |
1,952 |
|
|
634 |
|
|
3,778 |
|
|
1,216 |
|
|
Movements in credit loss allowance and write-offs |
71 |
|
|
(240 |
) |
|
597 |
|
|
(100 |
) |
|
Fair value movement on contingent consideration |
2,849 |
|
|
— |
|
|
2,849 |
|
|
— |
|
|
Share option charge |
885 |
|
|
245 |
|
|
1,609 |
|
|
1,063 |
|
|
Cash flows from operating activities before changes in working capital |
3,508 |
|
|
3,796 |
|
|
10,862 |
|
|
10,547 |
|
|
Changes in working capital |
|
|
|
|
|
|
|
||||
|
Trade and other receivables |
2,549 |
|
|
14 |
|
|
(2,639 |
) |
|
(1,243 |
) |
|
Trade and other payables |
(1,014 |
) |
|
1,464 |
|
|
304 |
|
|
2,710 |
|
Warrants repurchased |
(800 |
) |
|
— |
|
|
(800 |
) |
|
— |
|
|
Income tax paid |
(783 |
) |
|
(536 |
) |
|
(783 |
) |
|
(536 |
) |
|
Cash flows generated by operating activities |
3,460 |
|
|
4,738 |
|
|
6,944 |
|
|
11,478 |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
||||
|
Acquisition of property and equipment |
(99 |
) |
|
(188 |
) |
|
(242 |
) |
|
(218 |
) |
|
Acquisition of intangible assets |
(447 |
) |
|
(1,428 |
) |
|
(2,516 |
) |
|
(1,741 |
) |
|
Acquisition of subsidiaries, net of cash acquired |
(4,114 |
) |
|
— |
|
|
(23,409 |
) |
|
— |
|
|
Cash flows used in investing activities |
(4,660 |
) |
|
(1,616 |
) |
|
(26,167 |
) |
|
(1,959 |
) |
|
Cash flows from financing activities |
|
|
|
|
|
|
|
||||
|
Interest paid |
— |
|
|
— |
|
|
(120 |
) |
|
(121 |
) |
|
Principal paid on lease liability |
(79 |
) |
|
(49 |
) |
|
(165 |
) |
|
(95 |
) |
|
Interest paid on lease liability |
(45 |
) |
|
(47 |
) |
|
(95 |
) |
|
(96 |
) |
|
Cash flows used in financing activities |
(124 |
) |
|
(96 |
) |
|
(380 |
) |
|
(312 |
) |
|
Net movement in cash and cash equivalents |
(1,324 |
) |
|
3,026 |
|
|
(19,603 |
) |
|
9,207 |
|
|
Cash and cash equivalents at the beginning of the period |
33,069 |
|
|
14,035 |
|
|
51,047 |
|
|
8,225 |
|
|
Net foreign exchange differences on cash and cash equivalents |
(643 |
) |
|
107 |
|
|
(342 |
) |
|
(264 |
) |
Cash and cash equivalents at the end of the period |
31,102 |
|
|
17,168 |
|
|
31,102 |
|
|
17,168 |
|
Earnings Per Share
Below is a reconciliation of basic and diluted earnings per share as presented in the Unaudited Interim Condensed Consolidated Statement of Income for the period specified (USD in thousands, except share amounts, unaudited):
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
Net income for the period attributable to the shareholders |
56 |
|
2,445 |
|
4,542 |
|
6,911 |
|
Weighted-average number of ordinary shares, basic |
35,443,258 |
|
28,556,422 |
|
35,176,469 |
|
28,556,422 |
|
Net income per share attributable to shareholders, basic |
0.00 |
|
0.09 |
|
0.13 |
|
0.24 |
|
|
|
|
|
|
|
|
|
|
Net income for the period attributable to the shareholders |
56 |
|
2,445 |
|
4,542 |
|
6,911 |
|
Weighted-average number of ordinary shares, diluted |
36,057,597 |
|
31,401,166 |
|
36,131,524 |
|
31,401,166 |
|
Net income per share attributable to shareholders, diluted |
0.00 |
|
0.08 |
|
0.13 |
|
0.22 |
Supplemental Information
Rounding
We have made rounding adjustments to some of the figures included in the discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.
Non-IFRS Financial Measures
Management uses several financial measures, both IFRS and non-IFRS financial measures in analyzing and assessing the overall performance of the business and for making operational decisions.
Adjusted Net Income and Adjusted Net Income Per Share
Adjusted net income is a non-IFRS financial measure defined as net income attributable to equity holders excluding the fair value gain or loss related to contingent consideration. Adjusted net income per diluted share is a non-IFRS financial measure defined as Adjusted net income attributable to equity holders divided by the diluted weighted average number of common shares outstanding.
We believe Adjusted net income and Adjusted net income per diluted share are useful to our management as a measure of comparative operating performance from period to period as they removes the effect of the fair value gain or loss related to the contingent consideration which is not directly associated with our core operations. We expect to incur gains or losses related to the contingent consideration until April 2024. See Note 4 of the Unaudited Interim Condensed Consolidated Financial Statements for the period ended June 30, 2022 for a complete discussion of the contingent consideration.
Below is a reconciliation to Adjusted net income attributable to equity holders and Adjusted net income per share, diluted from net income for the period attributable to the equity holders and net income per share attributed to ordinary shareholders, diluted as presented in the Condensed Consolidated Statements of Comprehensive Income and for the period specified:
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
(in thousands USD, except for share and per share data, unaudited) |
|
(in thousands USD, except for share and per share data, unaudited) |
||||
|
Net income for the period attributable to the shareholders |
56 |
|
2,445 |
|
4,542 |
|
6,911 |
|
Fair value movement on contingent consideration |
2,849 |
|
— |
|
2,849 |
|
— |
Unwinding of deferred consideration |
160 |
|
— |
|
160 |
|
— |
|
Adjusted net income for the period attributable to shareholders |
3,065 |
|
2,445 |
|
7,551 |
|
6,911 |
|
Weighted-average number of ordinary shares, basic |
35,443,258 |
|
28,556,422 |
|
35,176,469 |
|
28,556,422 |
|
Net income per share attributable to shareholders, basic |
0.00 |
|
0.09 |
|
0.13 |
|
0.24 |
|
Adjusted net income per share attributable to shareholders, basic |
0.09 |
|
0.09 |
|
0.21 |
|
0.24 |
|
Adjusted net income for the period attributable to shareholders |
3,065 |
|
2,445 |
|
7,551 |
|
6,911 |
|
Weighted-average number of ordinary shares, diluted |
36,057,597 |
|
31,401,166 |
|
36,131,524 |
|
31,401,166 |
|
Net income per share attributable to shareholders, diluted |
0.00 |
|
0.08 |
|
0.13 |
|
0.22 |
|
Adjusted net income per share attributable to shareholders, diluted |
0.09 |
|
0.08 |
|
0.21 |
|
0.22 |
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is a non-IFRS financial measure defined as earnings excluding net finance costs, income tax charge, depreciation, and amortization, effect of non-recurring items, significant non-cash items, share-based payment expense and other items that our board of directors believes do not reflect the underlying performance of the business. Adjusted EBITDA Margin is a non-IFRS measure defined as Adjusted EBITDA as a percentage of revenue.
We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful to our management as a measure of comparative operating performance from period to period as they remove the effect of items not directly resulting from our core operations including effects that are generated by differences in capital structure, depreciation, tax effects and non-recurring events.
While we use Adjusted EBITDA and Adjusted EBITDA Margin as tools to enhance our understanding of certain aspects of our financial performance, we do not believe that Adjusted EBITDA and Adjusted EBITDA Margin are substitutes for, or superior to, the information provided by IFRS results. As such, the presentation of Adjusted EBITDA and Adjusted EBITDA Margin is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with IFRS. The primary limitations associated with the use of Adjusted EBITDA and Adjusted EBITDA Margin as compared to IFRS results are that Adjusted EBITDA and Adjusted EBITDA Margin as we define them may not be comparable to similarly titled measures used by other companies in our industry and that Adjusted EBITDA and Adjusted EBITDA Margin may exclude financial information that some investors may consider important in evaluating our performance.
Below is a reconciliation to Adjusted EBITDA from net income for the period attributable to the equity holders as presented in the Condensed Consolidated Statements of Comprehensive Income and for the period specified:
|
|
Three Months Ended June 30, |
|
CHANGE |
|
Six Months Ended June 30, |
|
CHANGE |
||||||||||||||
|
|
2022 |
|
2021 |
|
$ |
|
% |
|
2022 |
|
2021 |
|
$ |
|
% |
||||||
|
|
(in thousands USD, unaudited) |
|
|
|
|
|
(in thousands USD, unaudited) |
|
|
|
|
||||||||||
|
Net income for the period attributable to the shareholders |
56 |
|
|
2,445 |
|
(2,389 |
) |
|
(98 |
)% |
|
4,542 |
|
|
6,911 |
|
(2,369 |
) |
|
(34 |
)% |
|
Add Back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net finance costs (income) (1) |
(2,435 |
) |
|
130 |
|
(2,565 |
) |
|
n/m |
|
|
(3,012 |
) |
|
209 |
|
(3,221 |
) |
|
n/m |
|
|
Income tax charge |
130 |
|
|
582 |
|
(452 |
) |
|
(78 |
)% |
|
499 |
|
|
1,248 |
|
(749 |
) |
|
(60 |
)% |
|
Depreciation expense |
44 |
|
|
47 |
|
(3 |
) |
|
(6 |
)% |
|
87 |
|
|
82 |
|
5 |
|
|
6 |
% |
|
Amortization expense |
1,908 |
|
|
587 |
|
1,321 |
|
|
n/m |
|
|
3,691 |
|
|
1,134 |
|
2,557 |
|
|
n/m |
|
|
Share-based payments |
885 |
|
|
245 |
|
640 |
|
|
n/m |
|
|
1,609 |
|
|
1,063 |
|
546 |
|
|
51 |
% |
|
Fair value movement on contingent consideration |
2,849 |
|
|
— |
|
2,849 |
|
|
n/m |
|
|
2,849 |
|
|
— |
|
2,849 |
|
|
n/m |
|
|
Accounting and legal fees related to offering |
— |
|
|
392 |
|
(392 |
) |
|
n/m |
|
|
— |
|
|
898 |
|
(898 |
) |
|
n/m |
|
|
Bonuses related to the offering |
— |
|
|
1,090 |
|
(1,090 |
) |
|
n/m |
|
|
— |
|
|
1,090 |
|
(1,090 |
) |
|
n/m |
|
|
Acquisition related costs (2) |
180 |
|
|
— |
|
180 |
|
|
n/m |
|
|
454 |
|
|
— |
|
454 |
|
|
n/m |
|
|
Adjusted EBITDA |
3,617 |
|
|
5,518 |
|
(1,901 |
) |
|
(34 |
)% |
|
10,719 |
|
|
12,635 |
|
(1,916 |
) |
|
(15 |
)% |
|
________________ |
|
(1) |
Net finance (income) costs is comprised of finance income, and finance expense including unwinding of deferred consideration and foreign exchange gains (losses). |
|
(2) |
The acquisition costs are related to the business combinations of the Group. |
|
n/m = not meaningful |
|
Below is the Adjusted EBITDA Margin calculation for the period specified:
|
|
Three Months Ended June 30, |
|
CHANGE |
|
Six Months Ended June 30, |
|
CHANGE |
||||||||||||||||
|
|
2022 |
|
2021 |
|
$ |
|
% |
|
2022 |
|
2021 |
|
$ |
|
% |
||||||||
|
|
(in thousands, USD, unaudited) |
|
|
|
|
|
(in thousands, USD, unaudited) |
|
|
|
|
||||||||||||
Revenue |
15,924 |
|
|
10,392 |
|
|
5,532 |
|
|
53 |
% |
|
35,509 |
|
|
21,909 |
|
|
13,600 |
|
|
62 |
% |
|
Adjusted EBITDA |
3,617 |
|
|
5,518 |
|
|
(1,901 |
) |
|
(34 |
)% |
|
10,719 |
|
|
12,635 |
|
|
(1,916 |
) |
|
(15 |
)% |
|
Adjusted EBITDA Margin |
23 |
% |
|
53 |
% |
|
|
|
(30 |
)% |
|
30 |
% |
|
58 |
% |
|
|
|
(27 |
)% |
||
In regard to forward looking non-IFRS guidance, we are not able to reconcile the forward-looking non-IFRS Adjusted EBITDA measure to the closest corresponding IFRS measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items including, but not limited to, fair value movements, share-based payments for future awards, acquisition-related expenses and certain financing and tax items.
Free Cash Flow
Free Cash Flow is a non-IFRS financial measure defined as cash flow from operating activities less capital expenditures, or CAPEX.
We believe Free Cash Flow is useful to our management as a measure of financial performance as it measures our ability to generate additional cash from our operations. While we use Free Cash Flow as a tool to enhance our understanding of certain aspects of our financial performance, we do not believe that Free Cash Flow is a substitute for, or superior to, the information provided by IFRS metrics. As such, the presentation of Free Cash Flow is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with IFRS.
The primary limitation associated with the use of Free Cash Flow as compared to IFRS metrics is that Free Cash Flow does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. Free Cash Flow as we define it also may not be comparable to similarly titled measures used by other companies in the online gambling affiliate industry.
Below is a reconciliation to Free Cash Flow from cash flows generated by operating activities as presented in the Unaudited Interim Condensed Consolidated Statement of Cash Flows for the period specified:
|
|
Three Months Ended June 30, |
|
CHANGE |
|
Six Months Ended June 30, |
|
CHANGE |
||||||||||||||||
|
|
2022 |
|
2021 |
|
$ |
|
% |
|
2022 |
|
2021 |
|
$ |
|
% |
||||||||
|
|
(in thousands USD, unaudited) |
|
|
|
|
|
(in thousands USD, unaudited) |
|
|
|
|
||||||||||||
|
Cash flows generated by operating activities |
3,460 |
|
|
4,738 |
|
|
(1,278 |
) |
|
(27 |
)% |
|
6,944 |
|
|
11,478 |
|
|
(4,534 |
) |
|
(40 |
)% |
|
Capital Expenditures (1) |
(546 |
) |
|
(1,616 |
) |
|
1,070 |
|
|
66 |
% |
|
(2,758 |
) |
|
(1,959 |
) |
|
(799 |
) |
|
(41 |
)% |
|
Free Cash Flow |
2,914 |
|
|
3,122 |
|
|
(208 |
) |
|
(7 |
)% |
|
4,186 |
|
|
9,519 |
|
|
(5,333 |
) |
|
(56 |
)% |
|
(1) |
Capital expenditures are defined as the acquisition of property and equipment and the acquisition of intangible assets. |
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Andrew Cochrane Chief Business Officer of GiG
GiG increases Ontario market presence, powering the launch of Casino Time
Gaming Innovation Group Inc. (GiG), has announced the launch of Casino Time, powered by its award winning iGaming platform and pioneering real-time rules engine LogicX, with revolutionary sportsbook, SportX soon to follow, to further extend its footprint in the regulated Canadian province of Ontario.
The launch of Casino Time carries extra significance, marking only the second time that on-demand, regulated online Bingo has been made available in Ontario. The new Bingo product vertical, launched alongside a strong Casino offering, will be boosted by GiG’s new sportsbook, SportX, as part of a planned release later this year.
GiG has focused its solutions on driving exponential growth in revenue for operators with its highly scalable iGaming platform, offering localised third party content and leading suppliers for the Ontarian market. GiGs peerless gamification layer creates an optimised and immersive casino experience tailored to regional preferences, swelling client retention and player engagement.
Canadian owned and operated, Casino Time is a joint venture amongst leading retail operators in Ontario’s Charitable Gaming sector, delivering Bingo, Slots and Live Dealer Casino Games. Promising a personalised service and community experience, Casino Time is continuing its long-standing partnership with local charities, introducing its joint fundraising model into the iGaming space for the first time.
Now coming towards the end of its second year of licensed operations, Ontario has emerged as one of the largest iGaming markets in North America, second only to New Jersey according to data supplied by Vixio. The first and as yet only Canadian province to launch a regulated market, Ontario boasts more than 1.6 million active player accounts spread over 40 plus operators, generating €1.3 billion in Gross Gaming Revenue (GGR) in its first year of trading, with this data supplied by iGaming Ontario.
Andrew Cochrane, Chief Business Officer of GiG, said: “GiG continues to set the pace with a strong cadence of brand launches in 2024, and I’m pleased that when operators are seeking platform solutions in regulated markets, GiG is leading the pack. Our partnership with Casino Time, will help deliver something new and exciting to the Ontarian market, and further helps to demonstrate the flexibility of our solutions, adapting to match the regional aspirations of our partners to deliver growth.”
D’Arcy Stuart, CEO of Casino Time, said: “We are thrilled to partner with GiG as the core technology provider of our iGaming platform. Their powerful suite of player engagement tools, as well as diverse content and regulatory integrations, underpin our ability to serve and delight our player community. Our hybrid online and offline customer network, as well as unique bingo offerings, will drive exciting opportunities as the platform and the marketplace continues to grow.”
Bragg Gaming Group Inc., a global B2B gaming technology and content provider, announced that Chief Financial Officer (CFO), Ronen Kannor, has notified Bragg’s board of directors (Board) that he will resign from his position to pursue other career opportunities, effective June 3, 2024. The Company confirms that the search for a replacement CFO has commenced.
Matevž Mazij, Chief Executive Officer and Chair of the Board, commented: “We thank Ronen for his dedication and commitment to Bragg over the past four years and for his unwavering service as a pivotal member of the leadership team.
“During his tenure as CFO, the Company has undergone huge positive transformation including being uplisted to the Toronto Stock Exchange, dual listed on the NASDAQ and successfully completing two acquisitions, all while reporting consecutive years of revenue, gross profit and adjusted EBITDA growth. We wish Ronen all the very best in his future endeavors.”
Ronen Kannor commented: “It has been an honor to be part of the Bragg team which has successfully navigated many challenges and continued to deliver consistent growth over the past four years. I thank the Board for their support throughout my time with Bragg, and I am now fully focused on ensuring a smooth handover to my successor.
“Special thanks goes to my finance team, who work tirelessly to deliver the positive change and financial growth that the Company continues to achieve. I wish them and all of my colleagues continued success with Bragg now and in the future.”
- Betting handle of $423.2 million in FY 20231 increased 82% year-over-year, while reducing marketing spend 15%.
- Revenue of $35.7 million in FY 2023 increased 34%.
- Gross profit of $16.2 million in FY 2023, up 66% year-over-year.
- FY23 sets all-time records for average handle per customer, up nearly 30% year-over-year, average revenue per customer up 38% year-over-year, and record low cost of customer acquisition, down 15% year-over-year.
- Total player registrations eclipsed 2 million in FY23 while extending Gen Z market leadership.
- FY24 off to a strong start as the capital raised late Q4 is being effectively deployed – delivering strong KPIs, supported by betting margin trending toward a more than 20% increase over the average of FY23.
- To meet growing consumer demand the Company is adding greater support for cryptocurrency and exploring implementation of adjacent crypto-enabled technologies.
- Rivalry is seeing a rise in demand to license its in-house casino games, accelerating the advancement of its B2B vertical.
- Company re-affirms guidance, anticipates achieving profitability in H1 2024.
Rivalry Corp. (the “Company” or “Rivalry”) (TSXV: RVLY) (OTCQX: RVLCF) (FSE: 9VK), the leading sportsbook and iGaming operator for Gen Z, today announced preliminary and unaudited financial results for the three and 12-month periods ended December 31, 2023. All dollar figures are quoted in Canadian dollars.
“Rivalry exited 2023 as an increasingly diversified company – both geographically and across our product suite,” said Steven Salz, Co-Founder and CEO of Rivalry. “Last year we gained meaningful traction in new segments such as traditional sports, casino, and fantasy, which is widening our opportunity set and positioning us for sustainable growth in the medium- to long-term. We’re happy to have finished the year with all-time high customer economics, diversified revenue streams, and a reinforced competitive moat around Gen Z betting entertainment and experiences.”
“During Q1 we have been strategically deploying capital from our fourth quarter investment in areas that are driving customer acquisition and revenue – such as amplifying proven marketing strategies, releasing higher margin products, and developing proprietary betting experiences – that we expect will begin materializing in our results throughout the first half of 2024 and beyond,” added Salz.
“Our operational excellence across product and brand marketing last year are seen across positive KPI trends and continued year-over-year growth. Ultimately, we are proving that we can acquire and retain a coveted Gen Z demographic through an entertainment-led product set, culturally relevant brand, and a team unafraid of pushing past a long-standing industry status quo.”
Preliminary Full-Year 2023 Highlights2
- Betting handle was $423.2 million in the year ended December 31, 2023, an increase of $190.4 million or 82% from $232.8 million in 2022.
- Revenue was $35.7 million in 2023, an increase of $9.0 million or 34% compared to $26.6 million in the previous year.
- Gross profit was $16.2 million in 2023, an increase of $6.4 million or 66% from $9.8 million of gross profit in 2022.
- The Casino segment was a significant driver of growth in 2023, with revenues of $6.4 million up 92% from 2022, and representing 52% of betting handle in the year.
- The Company expanded its casino offering significantly during 2023, including the release of a new original game Cash & Dash in September, entry into the slots category in October, and the launch of its iOS mobile app in Ontario, enhancing the mobile casino experience and its accessibility.
- Diversified revenue streams through new segments including traditional sports, which has grown by 60% since FY22, and fantasy, highlighting the elasticity of Rivalry’s brand among Gen Z and broadening TAM.
- Total operating expenses of $38.9 million in 2023 decreased by $1.0 million year-over-year. The decrease was driven by a reduction in marketing expense, offsetting increases in general & administration and technology & content expense incurred to support the growth of the business.
- Net loss was $24.3 million for 2023, a reduction of 22% or $6.9 million from the net loss of $31.1 million in 2022.
Fourth Quarter 2023 Highlights
- Betting handle for the three-month period ended December 31, 2023 was $85.2 million, an increase of $1.2 million or 1.5% from $83.9 million in the fourth quarter of 2022 while marketing spend decreased by 32%.
- Revenue was $6.5 million in the Q4 2023, representing a decrease of $3.0 million or 32% from $9.4 million of revenue in Q4 2022 due to less favorable sportsbook outcomes compared against an abnormally favorable result experienced in Q4 2022. The Company notes that revenue as a percentage of betting handle was near the average achieved throughout FY23, highlighting the abnormally favorable margin outcome in the comparable quarter, Q4 2022.
- Gross profit was $3.0 million in Q4 2023, a decrease of $2.0 million or 40% from $5.0 million of gross profit in Q4 2022. The year-over-year decline follows the relative margin impact noted previously. Gross profit as a percentage of betting handle in Q4 2023 was equal to the average in FY23. Rivalry is also pleased to note that its ongoing efforts to stabilize and improve margin are yielding results, with Q1 2024 trending toward a more than 20% improvement over the average in FY23.
- Net loss was $9.0 million in Q4 2023, a reduction of $3.3 million compared to a net loss of $12.3 million in Q4 2022. Net loss adjusting for accruals, other non-cash items, and one-time expenses, would have been approximately $7.0 million.
- On November 15, 2023, Rivalry strengthened its balance sheet with the announcement of a private placement offering of $14 million principal amount senior secured convertible debentures to scale several strategic verticals across marketing, product development, and geographic expansion.
- Released Rivalry Ultimate Fan, a free-to-play NBA fantasy app, to acquire new users and engage existing customers within the product suite.
- First-party game ‘Cash & Dash’ released in September demonstrated next generation appeal as it became the fifth most-played casino game on our platform and among the top ten highest-grossing by revenue with momentum carrying into Q1, creating downstream licensing opportunities for Rivalry’s IP.
Outlook
“The year ahead is rife with new, innovative product releases arriving in Q2 and continuing throughout 2024,” Salz added. “In addition to the strength of our core roadmap, we are in the process of unlocking what we believe to be two of the most material developments to our business model since launching Rivalry in 2018. The first is a B2B vertical to license our in-house developed games, and the second is exploration and development within the crypto ecosystem – each representing an impactful growth catalyst on our path to profitability this year.”
“I have never had more confidence in our product roadmap and what Rivalry is building this year. Apart from new products, original games, and proprietary features, we have been working to dial-up the overall feel and entertainment value of our core product to provide a tech-savvy, next generation customer with a tailored experience that is well-differentiated within the larger sports betting marketplace.”
Investor Conference Call
Management will host a conference call at 10:00 a.m. EDT on Friday, April 5, 2024 to discuss the Company’s preliminary unaudited year-end and fourth quarter 2023 financial results.
| Dial-in: | 800-717-1738 (toll free) or (+1) 289-514-5100 (local or international calls) | |
| Webcast: A live webcast can be accessed from the Events section of the Company’s website | ||
| A replay of the webcast will be archived on the Company’s website for one year. | ||
Rivalry expects to file its audited financial statements and management discussion and analysis for the period ended December 31, 2023 by the end of April 2024. The documents will be available on SEDAR+ at sedarplus.ca, and on the Company’s website.
Related Party Transaction
On April 17, 2022 the Company entered into a secured demand loan (the “Loan”) with Kevin Wimer, the Chief Operating Officer and a Director of the Company. Pursuant to the terms of the Loan, the Company loaned Mr. Wimer US$385,000 which amount bears interest at 3.2% per annum and was repayable on demand by the Company and in any event by April 17, 2024 (the “Maturity Date”). The Loan was entered into to assist Mr. Wimer with the funding of certain tax obligations and is secured by a pledge of Mr. Wimer’s subordinate voting shares of the Company. The Company announces today that it has entered into an amendment to the Loan (the “Loan Amendment”) to extend the Maturity Date to April 17, 2026. The Loan Amendment was approved by the non-interested directors of the Company.
Mr. Wimer is a “related party” of the Company within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“). As a result, the Loan Amendment is considered to be a “related party transaction” as such term is defined by MI 61-101. The Company is relying on an exemption from the minority shareholder approval requirement set out in MI 61-101 as the fair market value of the transaction does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report more than 21 days before entering into the closing of the Loan Amendment as the details of the Loan Amendment were not settled until shortly prior to the entering into thereof.
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