GAN has provided further information regarding a strategic review of its business to evaluate alternatives and reallocate capital towards more appropriate growth strategies.
Speaking during the company’s recent Q4 earnings call, CEO Dermot Smurfit made it clear that the group still believes that there is a “tremendous unrealised value” in its proprietary technology offering, its patented IP and its B2C business.
The CEO noted that he and the GAN board feel it is “highly prudent” that all options are analysed to make the most of this value.
Smurfit said during the call: “As part of our commitment to improving our return to shareholders, we have launched a formal strategic review process to evaluate options available to us to facilitate that value creation process and hastened our path to better profitability metrics at a more attractive return profile. We hope to complete this process in a timely manner and will certainly provide updates as required.
“Let me be extremely clear on a very important point. I and my entire executive group firmly believe that there is tremendous unrealised value in our proprietary technology offerings, our patented IP and a growing profitable B2C business that generated annual revenue of nearly $90m this past year, which is well north of our current trading market cap.
“The board and I feel it’s highly prudent at this time to explore all options to realise this value. It’s also worth noting given the range of potential outcomes related to the strategic review, we do not currently have an adequate level of visibility to provide guidance for 2023 within a reasonable range.
“That said, we do expect a relatively swift resolution to the strategic review process and hope to be in a position to provide our financial outlook for 2023 at some point in the very near future.”
Smurfit added that while GAN is unable to provide any forward guidance due to the review’s potential outcomes, it is in “discussions with multiple involved parties and simultaneously evaluating numerous options” for the company moving forward.
GAN Q4 & 2022 financials
GAN’s announcement of a strategic review of its business comes with the group declaring that its Q4 revenue improved by 21 per cent year-over-year to $36.9m (2021: $30.42m) and its 2022 revenue grew by 14 per cent YoY to $141.52m (2021: $124.16m).
For the quarter, B2B revenue rose by 26 per cent to $14.1m (2021: $11.2m), while B2C income increased by 19 per cent to $22.8m (2021: $19.2m).
For the full year, B2B grew by 19 per cent to $54m (2021: $45.6m), while B2C improved by 12 per cent to $87.5m (2021: $78.6m).
However, GAN saw a significant net loss in both measuring periods (Q4: $147.7m, 2022: $197.5m) due to increased operating expenses (Q4: $172.4m, 2022: $292.4m) and non-cash impairment charges (Q4: $133.6m, 2022: $162.5m).
Adjusted EBITDA came in at a $6m loss for the quarter (2021: $400,000 gain) and it also fell for the full year to a $2.8m loss (2021: $6m gain).
Smurfit said as he concluded the earnings call: “While 2022 saw many important achievements, our profitability execution did not meet our expectations for the year.
“We understand that we have plenty of work to do in 2023 to improve our return profile and deliver better returns for our shareholders. We anticipated that the strategic review will facilitate that process along with our renewed focus on higher ROI opportunities.”