Bragg Gaming Group has released its financial results for the second quarter of 2022, declaring a 34.2% year-over-year increase in revenue to $21.3m compared to $15.9m in Q2 2021.
Commenting on the results, the recently appointed CEO Yaniv Sherman noted the “strong” Q2 performance, alongside its acquisition of Spin Games, will allow the supplier to leverage its “expertise and differentiated product and technology advantages to drive consistent growth with leading operators” in North America.
Bragg Gaming achieves ‘strong’ Q2 results
In Q2, alongside the $21.3m in revenue, Bragg Gaming also reported $4.3bn in wagering revenue generated by customers, a 10.3% YoY improvement (2021: $3.9bn), due to a change “in product mix towards PAM, managed services and proprietary content, resulting in improved gross profit and adjusted EBITDA”.
The provider’s gross profit during the quarter grew by 65.5% YoY to $11.9m (2021: $7.2m) thanks to a “higher revenue and a 1,060 basis point YoY margin improvement to a quarterly record 55.9%”.
Bragg Gaming notes the margin uptick occurred following higher revenue proportions in igaming and turnkey services which have “lower associated cost of sales” – including proprietary games which have no cost of sales – compared to games and content.
Net income in Q2 stood at $0.1m, an improvement on Q2 2021’s net loss of $2.4m due to “higher gross profit and lower professional fees and transactional costs, partially offset by an incremental increase in employee costs, sales and marketing expense, and higher depreciation and amortization”.
Bragg Gaming’s adjusted EBITDA for the quarter came in at $3.2m, an 62.9% YoY increase (2021: $1.9m), with its margin increasing by 260 basis points to 14.9%, but decreasing by 40 basis points on a quarterly sequential basis.
As of June 30, the provider’s cash and cash equivalents stood at $11.3m, which reflects the $9.2m paid for the Spin Games acquisition during the quarter.
Commenting on the results, CEO Sherman said: “Our strong second-quarter results include significant year-over-year growth, as well as quarterly-sequential improvements for revenue, gross profit, gross profit margin and adjusted EBITDA.”
He continued: “Our operating momentum highlights our continued success in serving a growing base of customers in an expanding number of regulated global igaming markets, with turnkey igaming solutions that power their businesses, including proprietary and exclusive third-party content.”
North American possibilities
Sherman also highlighted the completion of the Spin Games acquisition in the Q2 results, noting that Bragg Gaming now “possesses the product development capabilities, industry expertise and licensed footprint across Europe and North America to achieve further and consistent progress on our content and market expansion growth initiatives”.
The CEO noted that the supplier is expected to release approximately 22 proprietary games this year (120% YoY increase), as well as supplement its internal game development efforts with agreements for Bragg to exclusively distribute games from established third-party studios.
Through this content development and distribution strategy, Bragg Gaming believes it will achieve “a higher level of desirable ‘real estate’ allocation on leading igaming operators’ sites”, resulting in improvements in player engagement, as well as top-line growth and margin.
Sherman stated: “The North American igaming market continues to grow. We expect to leverage our expertise and differentiated product and technology advantages to drive consistent growth with leading operators in these markets. This includes content localization and customization that addresses popular online and land-based themes.”
2022 guidance raised
In reaction to its Q2 results, Bragg Gaming has lifted its 2022 full-year expected revenue range to $78m to $82m, and its FY2022 adjusted EBITDA outlook range to $10m to $11m.
The midpoints of these ranges represent a 34% and 46% growth respectively over the previously reported outlooks for the year, which were revenue in the range of $70m to $74m and adjusted EBITDA in the range of $9.7m to $10.7m.
Sherman concluded: “As demonstrated by our operating results to date in 2022, our success with these efforts is driving strong top-line growth and margin improvement, highlighting our ability to deliver near- and long-term shareholder value.”
