Bragg Gaming announces Q1 2021 results

First quarter revenue increases 62 per cent and Adjusted EBITDA increases by 234 per cent

2021 revenue guidance maintained at €47M

Accelerating rollout of proprietary in-house developed slot content

B2B gaming technology and content provider Bragg Gaming Group today released its financial results for the three months ended March 31, 2021.

“We’ve continued to build on the strong momentum of 2020 with an excellent first quarter,” said Richard Carter, CEO of Bragg Gaming. “Revenue is up by 62 per cent year-over-year and Adjusted EBITDA increased by 234 per cent. We’ve also seen a 54 per cent increase in the number of unique players using Bragg content, have launched nine new operators and our customer pipeline for the remainder of 2021 is expected to continue to grow and expand globally, underpinning future company growth in 2021.

“We continue to invest in our employees, our technology and our product offering, and this has allowed us to commercialise our in-house casino content studio, with our first game recently launched across our network,” continued Mr. Carter. “With further in-house casino games and player engagement tools scheduled for upcoming release, and our acquisition of Spin Games LLC laying the foundation for our strategy of building a tier one vertically integrated iGaming business in the U.S., Bragg Gaming has never been better positioned for long-term success.”

Q1 2021 financial highlights

• Revenue increased by 62 per cent to €14.2M (C$20.9M[1]) in the first quarter of 2021, compared to €8.8M (C$12.9M) for the first quarter of 2020, maintaining quarterly growth momentum since Q1 2019
• Quarter-over-quarter revenue increase of 3 per cent, from €13.8M (C$20.3M) in the fourth quarter of 2020 to €14.2M (C$20.9M) in the first quarter of 2021
• Wagering revenue generated by customers[2] up by 52 per cent to €3.5B (C$5.1B) compared to €2.3B (C$3.4B) in Q1 2020
• The number of unique players[3] using Bragg games and content increased by 54 per cent up to 2.4M, from 1.6M during the comparable period in Q1 2020
• Gross profit increased by 68 per cent to €6.6M (C$9.8M), compared to €4.0M (C$5.8M) with an increase in margins from 45 per cent to 47 per cent, mainly attributed to the shift in proportion of revenues from games and content to iGaming and turn-key services, the latter of which have lower associated cost of sales
• Net loss for the period was €1.1M (C$1.6M), a decrease of €4.6M (C$6.8M) from Q1 2020, mainly due to the full settlement of the ORYX earn-out on January 18, 2020, resulting in nil expenditure from re-measurement of deferred and contingent consideration and accretion on liabilities in the current quarter (Q1 2020: €5.0m)
• Adjusted EBITDA[4] was €2.3M (C$3.4M) in Q1 2021, up 234 per cent compared to €0.7M (C$1.0M) in Q1 2020, with an increase in margins from 8 per cent to 16 per cent, primarily as a result of higher scale
• Cash and cash equivalents as of March 31, 2021 increased to €30.1M (C$44.3M) compared to €26.1M as of December 31, 2020 (C$38.4M)

Selected first quarter 2021 performance indicators

Business highlights

• Successful launch of nine new B2C operators[5] during the period across a number of jurisdictions, including PAF (Finland), iGaming platform Senator (Croatia), Swiss market leader Casino Luzern and Maxbet (Romania)
• Improved customers revenue diversification, with 62 per cent of revenue for Q1 2021 derived from the top 10 customers, as compared to 65 per cent in Q1 2020
• Launched 11 new casino games fully certified and distributed successfully throughout the entire network
• Signed agreement to be the exclusive distributor of slots studio Sakuragate outside of Japan
• Completed a private placement for €1.9M (C$3.0M) – Board of Directors and management participated

Ongoing strategy

• On May 12, 2021, Bragg announced that it had entered into an agreement to acquire Spin Games LLC (“Spin”) in a cash and stock transaction for a purchase price of approximately US$30 million. Under the deal the sellers of Spin will receive US$10 million in cash and US$20 million in Common Shares of the Company, of which US$5 million in Common Shares will be issued on closing and the balance over the next three years. The transaction will close following final approval from state gaming regulators and satisfaction of other customary closing conditions
• Recently announced the appointment of Richard Carter to the role of CEO, effective May 1, 2021
• Announced intent to trade on the Nasdaq Stock Market and completed share consolidation to support the listing
• First in-house developed proprietary casino game launched across the Bragg network with encouraging early signs, with five more planned in the remainder of 2021
• Continuing to invest in technical infrastructure, an in-house content studio, increasing operational efficiencies, and deepening data analytics, gamification and bonusing features
• Continuing to explore strategic M&A opportunities in the U.S. and globally