Bragg Gaming Group Inc. (NASDAQ:BRAG) Q3 2023 Earnings Call Transcript

And we are now focused on working together with our customers to roll out with more FUSE driven promotions, and we’re now also able to offer FUSE as a stand-alone promotion platform for both casino and sportsbook. And we have already integrated our first customers under this model. As we continue to develop FUSE with more in-demand features coming soon, we’re also excited to be developing this proprietary functionality to create differentiated and unique casino content categories, with an aim of creating a niche for Bragg content in a crowded marketplace. We at Bragg are extremely proud of our full product suite, which includes our proprietary and exclusive content, aggregated content, sportsbook delivery, PAM, managed services, FUSE promotional tools and data and reporting products.

We have over 200 customers, including some of the biggest names in the United States, Europe and globally. Upselling our promotional tools, aggregation services, time and turnkey services to existing content customers is a key growth channel for us. Likewise, we are working with our integrated sportsbook partners to create compelling new PAM and full turnkey propositions with the aim of expanding our platform business to new brands and new markets. And as always, we continue to invest in our product to refine, improve and to explore opportunities in new jurisdictions. Our strategy is focused on expanding recurring profitability through our culture of continuous improvement with an eye on opportunities for increased automation and lower cost to serve.

This way, we will continue to expand our profit pools and gross profit and adjusted EBITDA margins. So to conclude, Bragg’s long-term ambition is to maximize shareholder value by becoming a premier iGaming content and technology provider. Moving to Slide 13. We extended the agreement with Betent BV, where we have agreed to continue supplying our PAM, that’s player account management platform and our content and content aggregation to its flagship brand in the Netherlands, BetCity into 2025. We partnered with BetCity to launch the brand back in October 2021 when the newly regulated Dutch market opened. And we’re proud of our part in helping BetCity become one of the leading online sports betting and casino brands in the Netherlands today, and we’re extremely delighted to continue to build on this success with them.

As a part of the extension deal, we will integrate several new third-party content suppliers for the Dutch market, further strengthening our localized content portfolio, but we will also continue to deliver content from our proprietary Bragg Studios, from our Powered by Bragg partners, and we will continue to be the exclusive content aggregator for BedCity via our product delivery technology for the duration of the agreement. Moving to Slide 14. On Slide 14, I want to give you an update on how we’re doing as a developer and distributor of exclusive online casino games. We are on track to release 68 games titles globally for a full year of 2023, putting our output up there with the biggest game studios on the market. Proprietary and exclusive game production has been a renewed focus for us in the past 2 years.

So I’m very proud of the development capacity we have built and of the quality of the games that we are releasing. As well as ramping up our online casino games production, we are maintaining a strategic balance with approximately half of the titles coming from our own Bragg Studios, which generate high margins for us, and half of it coming from our Powered by Bragg partners, bringing diversity, richness and in-demand studio brand store portfolio. As you can see, in the second half of 2023, our content releases significantly increased and we plan to continue at this cadence into 2024 and beyond. So in summary, our third quarter revenue rose 8% year-over-year to €22.6 million. Gross profit was €11.9 million, and adjusted EBITDA was up 7.5% year-over-year to €3.8 million.

We have extended our agreement with BetCity to continue as their exclusive PAM content and content aggregation partner into 2025. We have our strategic pillars in place that will underpin our growth going forward and which will drive shareholder value. And our exclusive content production road map is firing on all cylinders with 68 online casino titles on track to be launched in the full year of 2023, including 30 from our proprietary Bragg Studios. Current trading is in line with our expectations, so we reiterate our guidance for 2023 of €95 million to €97 million in revenues and €15.5 million to €16.5 million in adjusted EBITDA. The midpoint of these ranges represent 13.3% revenue growth and 32% adjusted EBITDA growth compared to our 2022 performance.

I want to thank you all very much for attending this presentation today. And now Ronen and I will be happy to take any questions you might have.

Operator: Thank you. [Operator Instructions] It looks like our first call is – caller is Gianluca Tucci with Haywood Securities. Gianluca, please go ahead.