GiG reports Q1 all-time revenue high as company split draws closer

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Gaming Innovation Group has reported another successive all-time high in revenue for the first quarter of 2024 ahead of the company’s planned breakup later this year.

Declaring a strong start to the year, the company has stated that it is operationally ready for the strategic split of its Media and Platform & Sportsbook operations, which is expected to be completed by Q3, pending approvals.

Q1 record

Publishing its Q1 results, GiG announced all-time high revenues of €36.2m, up 28 per cent in comparison to the same period last year (Q1 2023: €28.4m). Media revenues were positive, but Platform & Sportsbook fell against previous year comparisons, although underlying Software-as-a-Service revenue did increase.

Marketing expenses grew by 32 per cent year-over-year to €7.5m (2023: €5.7m), corresponding to 21 per cent of revenues (2023: 20 per cent). Other operating expenses increased by 45 per cent to €15.5m (2023: €10.7m).

Adjusted EBITDA for the company rose by eight per cent YoY to €12.6m (2023: €11.7m) with a margin of 34.8 per cent (2023: 41.1 per cent).

At the end of Q1, depreciation and amortisation amounted to €7.3m (2023: €5.6m), of which €3.2m (2023: €1.1m) was related to the acquisitions of AskGamblers, KafeRocks and other acquired affiliate assets. 

As of March 31, GiG reported a profit from continuing operations of €3.7m (2023: €4m) and a positive cash flow from operations of €10.3m, (2023: €13.2m) with a cash balance of €10.4m (2023: €10.7m).

Commenting on the Q1 performance, GiG Chair Petter Nylander said: “I am pleased to present to you our first quarterly report for the year 2024, outlining the significant strides and promising developments within our company.

“Since 2019, our GiG Media business has been on an upward trajectory, marked by robust cash flow and increased earnings diversity. The acquisition of AskGamblers in February 2023 has proven fruitful, driving solid revenue growth and First Time Depositors. 

“Moreover, the successful integration of KaFe Rocks in December 2023 has further diversified our business portfolio, contributing positively to our EBITDA margin.”

Nylander continued: “Our Platform & Sportsbook segment offers innovative and proprietary products with an unparalleled geographical footprint. The addition of new top management in Q4 brings extensive industry experience, laying a robust foundation for future growth. 

“The launch of our enhanced next-generation platform (Core X) and sportsbook (Sport X) signifies a significant step forward in product innovation, poised to capitalise on global opportunities.”

Positive Media revenue

GiG Media revenues reached a new record as well, improving by 52 per cent YoY (21 per cent organic) to €28m (2023: €18.4m) with EBITDA for the vertical rising to €13.5m (2023: €8m).

FTDs for Media rose by 13 per cent YoY to 125,100 (2023: 110,800), AskGamblers saw record traffic, players generated, revenue and EBITDA, while KaFe Rocks is showing promise with “revenue growth and a healthy EBITDA-margin”.

In addition, GiG highlighted that a new partnership in Latin America is already performing well, “generating hundreds of first-time depositors in the first days”, while Paid Media has “significantly improved earnings”.

However, as previously mentioned, Platform & Sportsbook Q1 revenues have fallen by 17 per cent YoY to €8.3m (2023: €10m) with the “variations and timing nature of set up fees, especially for the Enterprise Solution”, affecting quarter-on-quarter comparisons.

Adjusted EBITDA was a loss of €900,000 (2023: €3.6m) with a margin of minus 8.8 per cent (2023: 25.1 per cent).

During the quarter, GiG launched its next-gen X-suite igaming and sportsbook solutions CoreX and SportX and supported AI-led verticals, DataX and LogicX. Eight new brands went live on the platform too. Covering 35 markets, the number of live brands now stands at 67, with an additional 18 in the pipeline.

Nylander stated that GiG is optimistic about the outlook for the remainder of 2024, as the momentum from Q1 has rolled over into April. Revenues for the month are expected to be in the range of €9.8m to €10m, a 39 per cent increase YoY, of which 19 per cent is organic.

In addition, the GiG Chair noted that the planned Media and Platform & Sportsbook split is expected to take place in Q3 this year, subject to necessary corporate actions, legal and shareholder approvals.

Nylander said: “As we progress into the future, we remain steadfast in our commitment to creating sustainable long-term growth and value for our shareholders. Our strategic initiatives, including acquisitions, product innovation, and operational enhancements, are geared towards expanding our market reach and maximising revenue opportunities.

“In conclusion, I am confident that with our dedicated team, strategic focus, and unwavering commitment to excellence, we are well-positioned to capitalise on the exciting opportunities that lie ahead. 

“We appreciate your continued support and confidence in our vision as we embark on this journey of growth and transformation.”