FULL YEAR 2023 REVENUE RISES 10.4% TO EUR 93.5 MILLION (USD 100.5 MILLION)
AND ADJUSTED EBITDA GROWS 26.3% TO EUR 15.2 MILLION (USD 16.3 MILLION)
FULL YEAR GROSS PROFIT RISES 10.8% TO EUR 49.9 MILLION (USD 53.7 MILLION)
REFLECTING HIGHER REVENUE IN GROSS PROFIT TO 53.4%
TORONTO, March 26, 2024 /PRNewswire/ – Bragg Gaming Group (NASDAQ:BRAG) (TSX:BRAG) (“Bragg” or the “Company”), a global B2B content-driven iGaming technology provider, today reported record financial results for the fourth quarter and full year ended December 31, 2023. The Company also provided an update on its strategic growth initiatives and updated its growth targets for 2024 revenue and Adjusted EBITDA.
Summary of FY23 and 4Q23 Financial and Operational Highlights
Euros (millions)(1)
4Q23
4Q22
Change
Revenue
€
23.4
€
23.7
(1.4)
%
Gross profit
€
12.0
€
13.0
(7.3)
%
Gross profit margin
51.5
%
54.9
%
-330
bps
Adjusted EBITDA(2)
€
2.8
€
3.7
(23.7)
%
Adjusted EBITDA margin
11.9
%
15.4
%
-350
bps
Wagering revenue
€
6.1
B
€
5.1
B
18.1
%
Euros (millions)(1)
FY23
FY22
Change
Revenue
€
93.5
€
84.7
10.4
%
Gross profit
€
49.9
€
45.1
10.8
%
Gross profit margin
53.4
%
53.2
%
20
bps
Adjusted EBITDA
€
15.2
€
12.1
26.3
%
Adjusted EBITDA margin
16.3
%
14.2
%
210
bps
Wagering revenue
€
22.4
B
€
17.7
B
26.6
%
(1)
Bragg’s reporting currency is Euros. The exchange rate provided is US $1.00 = €0.93. Due to fluctuating currency exchange rates, this reference rate is provided for convenience only.
(2)
Adjusted EBITDA is a non-IFRS measure. For important information on the Company’s non-IFRS measures, see “Non-IFRS Financial Measures” below.
Chief Executive Officer Commentary
Matevž Mazij, Chief Executive Officer for Bragg, commented:
“Through Bragg’s strategic efforts to establish the business as a premier content-focused iGaming B2B provider and our meticulous control over expenses, we achieved growth in revenue, gross profit, and Adjusted EBITDA in 2023, along with a 210bps improvement in Adjusted EBITDA margin to 16.3%. 2023 revenue rose 10.4% to EUR 93.5 million (USD 100.5 million), gross profit increased by 10.8% to EUR 49.9 million (USD 53.7 million), and adjusted EBITDA increased by more than 26% to EUR 15.2 million (USD 16.3 million). These achievements are attributed, in part, to a reconfiguration of our revenue mix, favoring higher-margin products like internally developed proprietary content, and our comprehensive Player Account Management (“PAM”) platform, all while maintaining stringent cost control measures.
In the Netherlands, the Company maintains its dominant position as the leading PAM provider, serving five customers with our PAM solutions in the region. We are experiencing growth in the Czech market and are exploring new opportunities for expanding with our PAM platform, content aggregation, player engagement tools, and managed services in various international jurisdictions.
Upon closer examination of the Dutch market, it is evident that challenges have arisen due to increased competition and new regulations since July. These challenges are expected to persist, with further adjustments anticipated in 2024. Additionally, in Q4 2023, the Company extended its agreement with Entain Plc to supply its PAM platform to BetCity.nl, Entain’s Dutch iGaming operator, until 2025. However, this extension required renegotiating terms. These dynamic variables reduce customer concentration, and at the same time our broader business is thriving and poised for sustained, increasingly profitable growth.
Additionally, the global distribution of our proprietary and exclusive third-party content is rapidly expanding, particularly among an increasing number of Tier 1 operators. We anticipate a further surge in the global adoption of these games in 2024. Last year, we successfully launched a total of 29 new proprietary online titles worldwide, including 26 proprietary titles newly introduced to the European online casino markets and 15 proprietary titles newly introduced to the North American online casino markets. We expect to maintain or exceed this pace of game releases this year.
By continuously expanding our portfolio of higher-margin proprietary and exclusive third-party games to a wider range of new partners at an accelerated pace, we are well positioned for long term growth in top-line revenue, gross profit, and Adjusted EBITDA, along with improved operating margins.
Our strategic actions have positioned Bragg as an essential content source for leading international iGaming operators, strengthening our groundwork for consistent and profitable development. With confidence, we affirm our readiness with the appropriate strategies, financial strength, and infrastructure to maintain our business momentum while executing initiatives that foster cash flow growth and generate added value for our shareholders.”
Full Year and Fourth Quarter 2023 Business Highlights
The Company’s signed several Tier-1 content distribution agreements including with Betsson, 888/William Hill, and PokerStars.
The Company launched content in new regulated markets including in Belgium with Napoleon Sportsbook and Casino, in Italy with Microgame and in Mexico with Caliente.
Proprietary and exclusive games roll-out continued including with multiple new U.S. operators and in international markets including in Spain, U.K. and Switzerland.
Positive proprietary and exclusive content traction in North America from the fourth quarter onwards.
Fourth quarter highlights included launching proprietary content, aggregation and Fuze™ player engagement with Superbet in Brazil, rolling out new content with BetMGM in New Jersey, and announcing a PAM extension with BetCity.nl including content and product delivery.
Fourth Quarter 2023 Financial Results and other Key Metrics Highlights
Revenue decreased by 1.4% to EUR 23.4 million (USD 25.2 million) compared to EUR 23.7 million (USD 25.5 million) in 4Q22 reflecting the revised commercial terms agreed with a key strategic partner that took effect during the quarter.
Wagering revenue generated by customers of EUR 6.1 billion (USD 6.6 billion) increased from EUR 5.1 billion (USD 5.5 billion) in 4Q22.
Gross profit decreased by 7.3% to EUR 12.0 million (USD 12.9 million) from EUR 13.0 million (USD 14.0 million) in 4Q22 with gross profit margins decreased by 330bps to 51.5% from 54.9% mainly related to the revised commercial terms agreed with a key strategic partner that took effect during the quarter
Adjusted EBITDA decreased by 23.7% to EUR 2.8 million (USD 3.0 million) from EUR 3.7 million (USD 4.0 million) in 4Q22 with Adjusted EBITDA margins decreasing by 350bps to 11.9% from 15.4% due to the decline in the gross profit offset by improvement in costs optimisation.
Operational loss for the period was EUR 0.4 million (USD 0.4 million), a decrease of EUR 0.6 million (USD 0.6 million) from the same period in the previous year in 4Q22, primarily due to the lower gross profit while reducing selling, general and administrative expenses.
2023 Full Year Financial Results and other Key Metrics Highlight
Revenue increased by 10.4% to EUR 93.5 million (USD 100.5 million) compared to EUR 84.7 million (USD 91.1 million) in 2022.
Wagering revenue generated by customers of EUR 22.4 billion (USD 24.1 billion) increased from EUR 17.7 billion (USD 19.0 billion) in 2022.
Gross profit increased 10.8% to EUR 49.9 million (USD 53.7 million) from EUR 45.1 million (USD 48.5 million) in 2022, representing a gross profit margin of 53.4%.
Adjusted EBITDA ended EUR 15.2 million (