Bragg Gaming’s CEO Matevž Mazij has expressed confidence in the company’s future outlook for the second half of the year and into 2025 following a second quarter where a new quarterly record was achieved.
Mazij added that the Q2 results show how the igaming technology provider has diversified its business over various growing igaming markets and product verticals. However, gross profit and adjusted EBITDA were down in comparison to the same period the previous year.
The company also provided an update on its strategic review process initiated earlier this year in March, noting that it was “pleased with the progress made” but wouldn’t be providing specific comments until circumstances warrant.
New quarterly record
Publishing its Q2 financials, Bragg declared a 0.5% revenue increase year-over-year to €24.9m (Q2 2023: €24.7m), which Mazij says is “a new quarterly record” and reflects “a robust business performance diversified over several growing iGaming markets and in-demand product verticals”.
Gross profit and adjusted EBITDA declined in comparison to the same period last year, as they did in Q1, but Bragg’s CEO said that this was expected.
A drop of 10.3% YoY occurred for gross profit, coming in at €12.4m with a 49.9% margin (2023: €13.8m, 55.9% margin). Meanwhile, adjusted EBITDA fell by 23.8% to €3.6m with a 14.5% margin (2023: €4.7m, 19.2%).
Mazij noted that the decrease was due to a change in product mix, but the CEO was encouraged by recent momentum from higher-margin products. Revenue, gross profit and adjusted EBITDA have all improved in comparison to Q1 as well.
“As expected, gross profit and adjusted EBITDA were down 10.3% and 23.8% year over year respectively, as our product mix has changed,” commented Mazij.
“However, I am encouraged by recent momentum for our higher margin products including for our proprietary iGaming content in North America, and from launches of new customers powered by Bragg’s Player Account Management (“PAM”) and turnkey solutions.
“I am also pleased with sequential growth in revenue (+4.4%), gross profit (+4.4%) and adjusted EBITDA (+6.0%) compared to the first quarter of the year, a timeframe during which our product mix has remained consistent, and I am confident that we have the products, the strategy and the expertise in place to be able to continue to grow our revenues and profit margins in the second half of the year and into 2025.”
Leadership and expansion
Within its business highlights, Bragg noted its appointments of Robbie Bressler as interim CFO, Neill Whyte as CCO and Tommaso Di Chio as Chief Legal & Compliance Officer, as well as the launch of 17 new titles worldwide, including 12 games from its proprietary studio brands.
The igaming supplier also continued its global expansion, securing technology and content deals in the Czech Republic, the Netherlands, Italy and the US with the likes of Kingsbet, BetMGM, Golden Nugget, FanDuel, Hard Rock Casino, Metric, Kambi, Light & Wonder and Sisal.
Mazij said: “We have taken decisive steps to bolster our leadership team, expand our presence in key markets worldwide, and make significant inroads in the US market.
“With Bragg’s overall share of the US igaming content supplier market still estimated at below 1%, our expanding distribution in the United States along with our extensive distribution reach in regulated markets globally, represents a huge upside opportunity for the company, which is now licensed, certified or otherwise compliant with relevant local regulations in more than 30 jurisdictions.
“In the US we are pleased to be on track to more than double our wagering volume this year compared to 2023, and we look forward to continuing the trend into future years.”
Outlook
As of 30 June, cash flow generated from operations stood at €2.1m (2023: €5.2m), while cash and cash equivalents came in at €10.9m and net working capital, excluding deferred consideration, loans payable and convertible debt, was €10.5m.
The company also secured a €6.5m investment through a promissory note, “enhancing balance sheet flexibility to execute on strategy”.
For the rest of 2024, Bragg has reiterated its full-year revenue guidance range of €102m to €109m and its adjusted EBITDA range of €15.2m to €18.5m, but added it is “currently tracking to the lower end of guidance”.
The company also provided an update on its strategic review process, initiated earlier this year in March, noting that it “continues to be pleased with the progress made to date but will not be providing specific comments on the status of the process until circumstances warrant”.
Mazij concluded: “Looking ahead, I am confident that the seeds we are planting today – in the US, in content, and in our technology platform – will yield a robust harvest in the future.
“We are building a stronger, more agile Bragg that, along with our US distribution and global reach, is poised to capitalise on the immense opportunities that lie ahead in the worldwide igaming market.”