Bragg Gaming Group hails ‘strong’ Q2 financial performance
Company raises 2021 guidance for revenue, EBITDA.
Bragg Gaming Group, a global B2B gaming technology and content provider, on Wednesday reported its financial results for the second quarter, a three-month period ending June 30.
The Toronto-based company also provided an update on its strategic growth initiatives and issued guidance on future expectations for revenue and EBITDA.
Bragg said revenue increased by 27.6% to €15.5m ($18.3m) in Q2 2021, compared to €12.1m in Q2 2020.Wagering revenue generated by customers increased 15.9% to €3.8 billion from €3.3 billion in the same quarter one year earlier.
Gross profit increased by 37.5% to €7.0 million from €5.1 million in Q2 2020. The company said this jump reflected higher revenue and a 3.3% margin improvement to 45.4%. The margin expansion primarily was the result of the continued revenue mix shift toward a higher proportion of revenue from online gaming and turnkey services, which it said have lower associated cost of sales when compared to games and content.
Net loss for the period was EUR €2.3 million, an increase of EUR €1.9 million from Q2 2020, primarily due to incremental increase in employee costs and exceptional professional fees as a result of the company’s Nasdaq listing efforts, offset by increased gross profit and a reduction in costs in relation to deferred consideration payable.
Adjusted EBITDA was EUR €1.9 million, up 8.5% from €1.8 million in Q2 2020. Adjusted EBITDA margin decreased by 2.1% to 12.3%, which Bragg attributed to increased salary and subcontractors’ costs as part of the company’s investment in the expansion of its software development, product and management functions.
The number of unique players using Bragg games via its Oryx Hub distribution platform and content increased by 21.0% to 2.3m, from 1.9m in Q2 2020.
On June 2, Bragg completed its acquisition of Wild Streak LLC, a US- and European-focused proprietary casino content studio. As of June 30, Wild Streak had seven online casino games live in key online gaming markets, including in New Jersey, the UK and other regulated jurisdictions in Europe, which have helped grow Wild Streak’s revenue and adjusted EBITDA by 149% and 940%, respectively, in the first half of 2021 compared to the same period in 2020.
Bragg launched its first Wild Streak online game in Michigan last month, which it said produced a strong player response.
Looking forward, Bragg said it expects full-year 2021 revenue of €49m and adjusted EBITDA of €5.4m, compared to its prior, pre-acquisition guidance of revenue of €47m and adjusted EBITDA of €4m. This also compares to 2020 full year revenue and adjusted EBITDA of €46.4m and €5.5m, respectively.
In addition, Bragg initiated full year revenue guidance for 2022 of €54m to EUR €56m.
“Bragg had strong 2021 second quarter financial performance while also continuing to advance our in-house content development strategy and new market entry plans, including entry into the North American market, while also making progress on our Germany mitigation strategies,” Richard Carter, CEO of Bragg Gaming Group, said in a statement. “Overall, our comprehensive growth initiatives are expected to contribute to revenue and adjusted EBITDA growth over the balance of this year and more meaningfully in 2022.”
Carter said the acquisition of Wild Streak brings to Bragg a “fast-growing leading game development studio with a strong online content pipeline and expands on the in-house development capabilities of our Oryx Gaming studio. Wild Streak currently has seven online games live in New Jersey and other non-US markets including Dragon Power, which has been a top performing title in New Jersey since its release in May 2020. In the six-month period ending June 30, 2021, Wild Streak’s online gaming revenue has risen rapidly, and we expect ongoing growth as their pace of new game introductions increases going forward.”
According to Carter, Bragg’s pending acquisition of Spin Games LLC will “accelerate our entry into North American online gaming markets, help us port high-performing European online content into North America, and bring a wealth of US market and compliance expertise to Bragg. We expect our pipeline of internally developed premium content will increase to 33 new online games in 2022 up from five games produced by our Oryx Gaming studio in 2021.”
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