GAN Limited has published its fourth quarter and full-year 2021 financial results, where it is looking to maximize the “strong growth” seen in 2021 and continue that momentum into 2022 despite a slight drop in sports margin.
Due to an “abnormally low” sports hold, the firm’s Q4 revenue fell by 5.57% year-over-year to $30.5m (2020: $32.3m), with profits also decreasing by 11.6% YoY to $19m (2020: $21.5m) as a result of the sports margin drop.
GAN’s B2C revenue dipped during the quarter to $19.2m, 9% down YoY (2020: $21.1m) attributed to the aforementioned low sports hold of 4.6%. However, B2B revenue improved YoY to $11.3m (2020: $11.2m) as a $900,000 increase in platform and content fees counteracted an $800,000 fall in development services.
The firm reported a Q4 adjusted EBITDA loss of $5m (2020: $800,000) and a net loss of $8.5m (2020: $8.6m). The group debuted in Connecticut, gained Ontario certification, and finalized its acquisition of Silverback Gaming during the measuring period.
CEO Dermot Smurfit commented: “Our fourth quarter financial results were adversely affected by the volatile sports margin in our B2C segment consistent with other international operators, which was partially offset by continued strong new customer growth.”
For 2021, GAN’s net revenue jumped to $125.4m (2020: $35.2m), driven by its purchase of Coolbet and improvements in its B2B division.
Over the full-year, the firm’s B2B revenue came in at $46.8m, a 32.9% improvement YoY (2020: $35.2m), thanks to a $10.7m rise in platform and content fee contributions, as well as real money igaming growth across Michigan, West Virginia, and Connecticut.
Meanwhile, B2C revenue came in at $78.6m, a 133% YoY increase after a “robust growth in active customers” throughout the year.
Adjusted EBITDA improved YoY to a loss of $100,000 (2020: loss of $2.3m), but net loss increased to $24.9m (2020: $20.2m) after “higher operating costs as a result of the Coolbet acquisition and overall growth of the business within the Company’s B2B segment”.
Smurfit continued: “We have not lost sight of the fact that we delivered incredibly strong revenue growth in 2021, made numerous strategic steps toward solidifying our future, and are projecting another year of very strong revenue growth as well as much improved profitability as we achieve better scale.”
For 2022, GAN CFO Karen Flores declared that the firm is “strategically focused on implementing cost controls to accelerate profitability to help drive improved shareholder returns”.
As a result, GAN is projecting revenue in the range of $155m to $165m for the current year, a 28% improvement at the midpoint, and an adjusted EBITDA of $15m to $20m.
Flores stated: “Our focus in 2022 is placing additional emphasis on our path to profitability and ensuring we capture the margin profile we are capable of attaining.
“We are entering the new year with encouraging momentum around the launch of new clients and the advancement of initiatives such as SuperRGS and GAN Sports while strategically focused on implementing cost controls to accelerate profitability to help drive improved shareholder returns in 2022.”
Smurfit added: “Looking out to 2022 we envision a year of improved financial performance driven by existing growth in B2C, the launch of Ontario, new state launches in the US, and continued momentum behind our key initiatives like SuperRGS, and GAN Sports.
“We are acutely focused on our profitability in 2022 and have taken decisive actions to improving our profitability metrics and margins. Recent sports wins such as Red Rock Resorts and SuperRGS wins like Entain are demonstrating the value behind the investments we are making in the business and validating the quality of our technology and exclusive content.
“In addition, we recently took considered legal action to defend our patented intellectual property to ensure that it remains both protected and monetized. We believe our patents are enforceable and we are prepared to take a more proactive approach going forward.”
