Sports betting and igaming provider GAN Ltd has published its 2021 Q1 operating and financial results, citing a strong start to the year and a surge in revenue growth.
The firm reported total revenues of $27.8m versus $7.7m year-on-year, a 263% increase driven by the $14.3m contribution from Coolbet to its B2C segment and growth of $5.8m from its B2B activities.
CEO Dermot Smurfit: “We started the new year on a strong note with 263% top-line growth year-over-year, fueled by both organic growth as well as the Coolbet acquisition. We completed a record five RMiG partner launches during the first quarter, highlighted by our groundbreaking launch and strong results in Michigan, plus our exciting new partnerships with Wynn and Churchill Downs.
“We carried that momentum into the second quarter, with now 10 launches year-to-date, exceeding all of 2020. Most notably, we completed a successful multi-faceted transition onto our platform for Churchill Downs’ TwinSpires branded sports betting and igaming across five states leveraging our scarce multi-State ‘One Account, Any Product, Any State’ technical capability.”
Smurfit also hailed the long-term exclusive content deal secured with Ainsworth, saying: “This key partnership will increase the company’s overall ‘take rate’ on gross operator revenue from igaming, and help us secure a fast-growing share of existing igaming revenues from B2C operators who are not already partners of GAN.”
He added: “Looking ahead, our pipeline continues to expand with new opportunities for our industry-leading B2B offering here in the US. Lastly, we are thrilled with Coolbet’s strong contribution this quarter and how seamlessly we’ve been able to integrate the team. Coolbet offers a dual growth platform with our anticipated launch of their B2B sportsbook engine in the US later this year and its exciting B2C international growth opportunity.”
GAN’s Q1 B2B segment revenues were up 76% to $13.5m, driven by a RMiG increase of 68% to $10.5m and a SIM increase of 114% to $3m. B2C segment revenues of $14.3m were derived from Coolbet’s existing international sports betting and casino gaming operations.
Segment gross profit of $19.1m versus $6m, up 220%, was driven by an $8.3m contribution from the acquisition of Coolbet to GAN’s B2C segment, plus strong organic growth and new customer launches within B2B.
A net loss of $4.5m versus net income of $0.7m was driven primarily by increased amortization related to acquired intangibles from the Coolbet acquisition ($2.9m), increased share-based compensation ($1.2m), and operating expenses related to marketing, organizational expansion to meet market and customer demand, and costs related to regulatory requirements.
Adjusted EBITDA for Q1 was $1.7m versus $2.5m. The decrease was driven by increased operating costs in the current year related to regulatory requirements and organizational expansion to meet market and customer demand.
CFO Karen Flores commented: “Our first quarter financial results exceeded our expectations, and the outlook remains positive for the balance of 2021. We are increasing our full year revenue guidance to a range of $103m to $108m.
“As we gain scale, become more efficient, and move through a period of significant investment for growth, we anticipate to drive improved profitability. These factors will yield better operating leverage across the business over the long-term and further bolster our strong financial position as we execute our growth strategy, support new and existing customer launches and launch the B2C sports book technology later this year.”
