Bragg Gaming Group has increased its financial outlook for the coming year, citing a “strong” second quarter performance powered by “comprehensive growth initiatives.”
The company has been praised for its continuous focus on developing its in-house content production strategy and new market ambitions, which include entering the North American market and progressing with German mitigation tactics.
Revenue climbed by 27.6 percent to €15.5m ($18.3m) in Q2 compared to €12.1m ($14.3m), including 28 days of contributions from the former, during a period in which Bragg purchased Wild Streak Gaming and Spin Games in order to pursue its US strategy.
Oryx Hub distribution
The number of unique players playing Bragg games via its Oryx Hub distribution infrastructure and content climbed 21 percent to 2.3 million from 1.9 million, bringing wagering income up to €3.8 billion ($4.5 billion) from €3.3 billion ($3.9 billion).
Gross profit increased by 37.5 percent to €7 million ($8.3 million) from €5.1 million ($6 million), owing to a continued revenue mix shift toward a higher proportion of revenues from igaming and turnkey services, which have “lower associated cost of sales when compared to games and content,” according to the company.
Increased gross profit and a reduction in costs related to deferred consideration payable offset a rise in personnel costs and unusual professional fees as a result of the Nasdaq listing efforts, resulting in a net loss of €2.3m ($2.8m), up €1.9m ($2.3m) year on year.
Increased salary and subcontractor expenditures as part of the company’s investment in the expansion of its software development, product, and management responsibilities resulted in adjusted EBITDA of €1.9m ($2.2m), up 8.5 percent from €1.8m ($2.1m).
Meaningful progress with strategic growth initiatives
Bragg Gaming Group’s CEO, Richard Carter, explained: “Throughout the second quarter, we made meaningful progress with our strategic growth initiatives including expanding existing customer relationships, building out a pipeline of premium in-house igaming content, and providing our content and offerings to new markets throughout North America and Europe.
“These and other strategies are transforming Bragg into a leading content focused, B2B igaming provider and will help drive growth as we leverage our scalable technology stack, which features industry unique player engagement tools, and proprietary intellectual property to address the burgeoning global online casino markets.
“We believe our growth initiatives will not only help to rapidly mitigate the near-term impact from the new Germany regulatory structure, but more importantly will help drive our execution on future revenue growth opportunities and lead to significant expansion of our EBITDA margins over the medium term.”
Bragg also increased its full-year revenue and adjusted EBITDA estimate for the current year, which now includes Wild Streak contributions.
The company expects revenue of €49 million ($57.8 million) and adjusted EBITDA of €5.4 million ($6.4 million), up from €47 million ($55.5 million) and adjusted EBITDA of €4 million ($4.7 million) in its pre-acquisition guidance.
This compares to full-year revenue and adjusted EBITDA of €46.4 million ($54.8 million) and €5.5 million ($6.5 million) in 2020, respectively.
Bragg also announced full-year revenue projection of €54 million to €56 million ($63.7 million to $66.1 million) for 2022.
“As we continue to transition to the distribution of internally developed content, we remain focused on growing the number of markets we serve,” Carter added.
“We are moving forward with further expansion in the US and preparing for the introduction of our games in Ontario when that market opens, which is expected before year-end.
“While we will continue to serve the German market, we are diversifying away from our historic revenue concentration in that market based on our entrance into new North American and international igaming markets such as the UK and Italy, which are the two largest European markets.
“Our market expansion and revenue diversification initiatives will help offset the anticipated revenue decline in Germany related to the new regulatory regime, as reflected in our expectation that full year 2021 revenues will rise 5.6 per cent year-over-year.
“We expect our entry into new markets will be a significant driver of growth throughout 2022 as we expect to increase the TAM we can address more than 500 per cent to over $18bn.”