Bragg Gaming has reported record revenue, gross profit and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) in both its its full year 2022 results ended 31 December and its fourth quarter.
Bragg’s revenue for the fourth quarter was €23.7m (£20.8m/$25.5m) a rise of 50.3% year-on-year, while revenue for the full year was €84.7m – up by 45.2%.
Yaniv Sherman, chief executive officer at Bragg, said that the results were “transformational” and added that they signified Bragg’s growth throughout the year.
“Bragg concluded a transformational 2022 with another quarter of record results, as fourth quarter revenue, gross profit and adjusted EBITDA grew significantly compared to the fourth quarter of 2021 and exceeded our prior expectations,” said Sherman.
“These record results highlight Bragg’s ongoing substantial momentum as we continue to successfully diversify our operations from serving primarily central-European igaming markets to become a global, content-led, igaming solutions provider with extensive distribution across North America and Europe.”
The year had been an eventful one for Bragg. In March 2022, it was granted supplier licences in Ontario and the Bahamas.
It officially completed its $30.0m acquisition of Spin Games in June following approval for a licence in Pennsylvania.
In September, it secured $8.7m in funding from Lind Global Fund. Also in September, Bragg announced that it would consolidate all its companies and businesses under a single brand.
Full year results
A majority of Bragg’s revenue for the year came from its operations in the Netherlands. As the Netherlands’ online gaming market only opened on 1 October 2021, the revenue for 2022 was significantly higher then in 2021, growing by 533.7% to €36.8m.
Curaçao was the second highest territory at €17.2m, while revenue in Malta came to €14.6m. The remaining revenue came from the US, Croatia, Serbia, Romania, and other territories.
Cost of revenue for the full year was €39.6m, an uptick of 32.1% from 2021. This brought the gross profit to €45.0m, a rise of 59.1%.
Selling, general and administrative expenses also grew, from €34.6m to €46.7m. Employee costs generated the highest expense, at €23.1m. This was followed by depreciation and amortisation costs, which totaled at €8.4m, and professional fees, which came to €3.4m.
The remaining expenses consisted of corporate, sales and marketing and IT and hosting costs among others.
These expenses, alongside three gains on remeasurement – consisting of derivative liability, consideration receivable and deferred consideration – which added up to €854,000, resulted in an operating loss of €828,000, significantly less than the loss of €6.3m recorded in 2021.
Net interest expense came to €1.0m, up from €340,000, bringing the pre-tax loss to €1.9m.
Following income tax at €1.5m, the net loss for the year was €3.4m, down by 53.6% yearly.
Adjusted EBITDA for the year was €12.1m, up by 64%.
Wagering revenue came to €17.7m, a rise of 24%.
Fourth quarter results
Gross profit for the quarter was €13.0m, a rise of 61.1%. Bragg stated that this increase was due to a change in product focus to turnkey player account management (PAM) customers, managed services and proprietary content. Bragg also said that this resulted in the adjusted EBITDA total for the year, which was €3.6m, shooting up by 128.3%.
Wagering revenue generated in the fourth quarter was €5.1m, 65.4% higher than in Q4 2021.
Operating profit for the quarter was €162,000. This was up from the operating loss of €1.8m generated in Q4 2021.
Net loss was €900,000 for the quarter, an improvement from the loss of €2.0m in Q4 2021.
Projections for 2023
Due to these results, Bragg has updated its full year 2023 guidance to lie between €92.0m and €97.0m. If the midpoint of this bracket is reached, this will signify growth of 12%.
Adjusted EBITDA has been updated to be between €14.5m and €16.5m, the midpoint of which would represent year-on-year growth of 28%.
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