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Bragg

Bragg Gaming Group 2021 Third Quarter Revenue Rises 9.9%

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New Proprietary Online Content, Market Expansion and Customer Additions
Driving Continued Quarterly Growth and Increased Forward Outlook

Raises Full Year 2021 Revenue Guidance to EUR €55-56 million (USD $65-66 Million[1])

and Adjusted EBITDA to EUR €6.6-€6.8 million (USD $7.8-8.0 million); Increases Full Year 2022 Revenue Guidance by 9% to €59-61 million (USD $70-72 Million)

Bragg Gaming Group, a global B2B gaming technology and content provider, today reported financial results for the third quarter ended September 30, 2021, provided an update on its strategic growth initiatives and raised its full year 2021 revenue and Adjusted EBITDA and full year 2022 revenue guidance.

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Summary of Q3-21 Financial and Operational Highlights

Euros (Thousands) Q3-21 Q3-20 % Change
Revenue € 12,874 € 11,714 9.9%
Adjusted EBITDA € 1,418 € 1,834 -22.7%
Adjusted EBITDA margin 11.0% 15.7% -4.7%
Operational Q3-21 Q3-20 % Change
Wagering revenue (Euros) € 3.2B € 3.0B 4.8%
Unique players[2] 2.1M 1.9M 14.4%
Revenue / top 10 customers 54.3% 55.6% -1.3%

 

Select Recent Strategic Development Progress

  • On August 27, Bragg’s common shares began trading on the Nasdaq Global Select Market.
  • Bragg continues to diversify its European market penetration, including earlier activations in Spain and Denmark followed by Greece in the third quarter.
  • In October, the Company entered the newly regulated market in the Netherlands with operators including state-owned Holland Casino, the state-owned Lottery (Nederlandse Loterij) and BetCity.nl.
  • In October, the Company entered into an integration agreement with Playtech that will see the full range of ORYX Hub games become available to operators utilizing the Playtech Games Marketplace platform in markets such as Spain, Italy, Switzerland, the Netherlands, the UK, Mexico and Latin America. The Company believes the integration with Playtech offers material medium and long-term growth opportunities for its existing third-party content and for its future in-house developed proprietary content. In addition, the agreement with Playtech will further drive Bragg’s strategic shift into new regulated markets and focus on supplying larger Tier 1 iGaming operators.
  • During the third quarter the Company launched nine new customers.
  • The Company continues to actively pursue and prepare for entry into new online gaming markets, including Europe’s two largest iGaming markets, the UK and Italy. Contributions from these two markets are expected to begin in 2022. The Company has applied for licenses in New Jersey, Pennsylvania and Michigan, and is in the process of applying for a license in Ontario.
  • During the third quarter, the Company launched 13 new exclusive games via its ORYX Hub in partnership with third-party studios, and two new proprietary games from its in-house studio.
  • As of September 30, 2021 the Company’s Wild Streak game development studio had nine online casino games live in key iGaming markets such as New Jersey, Michigan, the UK and other regulated European jurisdictions. Wild Streak also recently expanded its relationship with Sega Sammy Creation Inc., whereby Sega Sammy will develop two additional Wild Streak games that are popular in social and online casinos — Dragon PowerTM and Egyptian MagicTM — for land-based casinos.
  • The Company expects to complete its acquisition of Spin Games LLC (“Spin Games”) in the current quarter, pending final regulatory approvals from various U.S. states’ gaming commissions. Upon completion of the transaction, Bragg will gain access to key strategic operator relationships in the U.S. where Spin Games has over 30 customers, including leading iGaming operators. The Company has completed the technical integration between Spin Games and its ORYX Hub distribution platform.

CEO Comments

“Bragg’s strong 2021 third quarter financial performance and our increased guidance reflects the contributions from our comprehensive growth initiatives, including the consistent progress we have achieved with new market diversification and our ability to offer more new high-performing propriety and exclusive third-party online content,” said Richard Carter, CEO of Bragg Gaming Group.

“During the third quarter, our newest markets performed above our expectations and this momentum continues in the current quarter to-date. Besides the benefits from new market penetration, our recent proprietary games from our in-house development studios are also driving growth. Third quarter revenue rose 9.9% year over year to EUR €12.9 million (USD $15.2 million) while Adjusted EBITDA decreased by 22.7% to EUR €1.4 million (USD $1.7 million) primarily reflecting our ongoing investments in our development teams and infrastructure to support our growth initiatives.

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“Bragg continues its transformation into a leading, content-focused, B2B iGaming provider with a scalable technology stack featuring unique player engagement tools that consistently drive strong game performance. Our technology advantages, combined with our ability to offer an increasing number of high-performing proprietary and third-party exclusive games, are expected to boost our ability to deliver strong financial results as we continue to expand our presence into new North American and European markets. This includes the further penetration of our more recently entered markets such as the Netherlands where we have quickly achieved an attractive double-digit market share. Overall, our market expansion initiatives are expected to increase our total addressable market (“TAM”) six-fold in 2022 to more than USD $18 billion. Our acquisition of Spin Games, which we expect to complete by year end, will also help accelerate our entry into North American iGaming markets driven first by high-performing European online content to be closely followed by proprietary content developed specifically to address the U.S. and Canadian markets.

“We also intend to increase the number of proprietary online games developed by our internal development studios, as well as the number of exclusive third-party games we offer, which will support our focus on growing Adjusted EBITDA margins. From zero in-house developed games in 2020, we have established a strong proprietary new game pipeline and expect that an increasing proportion of our exclusive titles launched next year will be internally developed. Given the significantly better economics associated with the distribution of our proprietary content, leveraging our leading player engagement tools with our proprietary games remains one of our highest priorities as it will lead to consistent top and bottom line growth.”

Mr. Carter concluded, “Our ability to simultaneously generate positive Adjusted EBITDA while investing to grow our scale and technology capabilities enables Bragg to more effectively help online casino operators connect with their players, resulting in consistent market expansion and market share improvement. As a result, we continue to deliver strong near-term financial performance while further establishing the foundation for sustainable Adjusted EBITDA growth, as reflected in our raised full year 2021 outlook as well as the increase in our outlook for 2022 revenue growth. Notably, our updated guidance highlights the underlying momentum we are achieving in our business that is being driven by our growth initiatives that are focused on entering new markets, adding new clients and developing and releasing more proprietary titles.”

Third Quarter 2021 Financial Results and other Key Metrics Highlights

  • Revenue increased by 9.9% to EUR €12.9 million (USD $15.2 million) in Q3 2021 compared to EUR €11.7 million (USD $13.8 million) in Q3 2020, inclusive of a full quarter of contributions from Wild Streak.
  • Wagering revenue generated by customers increased 4.8% to EUR €3.2 billion (USD $3.8 billion) compared to EUR €3.0 billion (USD $3.6 billion) in Q3 2020.
  • The number of unique players using Bragg games via its Oryx Hub distribution platform and content increased by 14.4% to 2.1 million, from 1.9 million in Q3 2020.
  • Gross profit increased by 30.1% to EUR €6.6 million (USD $7.8 million) from EUR €5.1 million (USD $6.0 million) in Q3 2020, reflecting higher revenue and an 8.0 basis point margin improvement to 51.4%. 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.
  • Net loss for the period was EUR €2.5 million (USD $2.9 million), a decline in the net loss of EUR €0.7 million (USD $0.8 million) from Q3 2020, primarily due to the higher  gross profit and a reduction in costs related to deferred consideration payable, partially offset by the incremental increase in employee costs and exceptional professional fees as a result of the Nasdaq listing.
  • Adjusted EBITDA was EUR €1.4 million (USD $1.7 million), a decrease of 22.7% compared to EUR €1.8 million (USD $2.2million) in Q3 2020. Adjusted EBITDA margin decreased by 4.7 basis points to 11.0%, reflecting increased salary and subcontractor costs as part of the Company’s investment in the expansion of its software development, product and management functions.
  • Cash and cash equivalents as of September 30, 2021 was EUR €20.3 million (USD $24.0 million)

Raises Full Year 2021 Revenue and Adjusted EBITDA Guidance and Full Year 2022 Revenue Guidance

Reflecting the Company’s operating momentum related to operations in newer markets and an increasing number of customers, Bragg today raised its outlook for 2021 full year expected revenue to EUR €55-56 million (USD $65-66 million) and Adjusted EBITDA to EUR €6.6-6.8 million (USD $7.8-8.0 million), compared to its previously provided revenue and Adjusted EBITDA full year outlook of EUR €49 million (USD $57.8 million) and EUR €5.4 million (USD $6.4 million), respectively. In addition, the Company raised its full year 2022 revenue guidance to a new range of EUR €59-61 million (USD $70-72 million), compared to the initial expected range of EUR €54 million to EUR €56 million (USD $63.7 million to USD $66.1 million) which was provided on August 11, 2021 and provided Adjusted EBITDA guidance of EUR €6-7 million (USD $7.1-8.3 million).

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Bragg

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.

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.

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“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]

¡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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