GAN Reports First Quarter 2024 Financial Results

Business Wire
11 min read

In This Article:

Growth in B2B revenues and reduced operating expenses offset by unfavorable B2C sports margin

Merger with SegaSammy remains on track to close in Late 2024 or Early 2025

IRVINE, Calif., May 09, 2024--(BUSINESS WIRE)--GAN Limited (NASDAQ: GAN) (the "Company" or "GAN"), a leading North American B2B technology provider of real money internet gaming solutions and a leading International B2C operator of Internet sports betting, today reported its unaudited financial results for the first quarter ended March 31, 2024.

"Our first quarter saw strong B2B revenue growth of nearly 10% as well as successful ongoing cost initiatives to reduce our overall operating expenses by 20%," commented Seamus McGill, GAN’s Chief Executive Officer. "Our B2C revenues were impacted by a lower sports margin, though we are excited about the pending rollout of new products such as pre-built parlay bets and the upcoming major events like the European Championship as well as Copa America – one of the largest soccer tournaments in Latin America where Coolbet is particularly strong."

Mr. McGill added, "Meanwhile, we continue to optimize how we operate the business as we work toward a successful closing of our merger with SegaSammy. GAN shareholders overwhelmingly approved the merger in February, and more recently, we have submitted our application to the Committee on Foreign Investment in the U.S. (CFIUS) as well as all applications with relevant gaming regulatory authorities. We continue to expect the transaction to close in late 2024 or early 2025."

First Quarter 2024 Compared to First Quarter 2023

  • Total revenue of $30.7 million decreased 13% due to a decrease in the B2C segment.

  • B2B segment revenue was $12.3 million versus $11.3 million. The increase was primarily due to an expansion of our B2B offerings in the state of Nevada.

  • B2C segment revenue was $18.3 million versus $23.9 million. The decrease was primarily due to reduced player activity and lower sports margins.

  • Total segment contribution was $21.3 million versus $25.0 million, which was primarily driven by a decrease by the aforementioned factors impacting B2C segment revenue.

  • Operating expenses were $24.6 million versus $31.0 million. The decrease was primarily attributable to the Company's overall reduction of compensation costs and reduced headcount realized as part of ongoing cost saving initiatives, as well as lower D&A as a result of intangible assets fully amortizing in the prior year period.

  • Net (loss) income of ($4.2) million versus $1.5 million. The prior period was bolstered by a $9.3 million one-time gain associated with the amended Content Licensing Agreement.

  • Adjusted EBITDA was $(0.6) million versus $0.0 million. The modest decrease was primarily due to lower B2C revenue.

  • Cash was $36.6 million as of March 31, 2024, versus $38.6 million as of December 31, 2023. The decline was primarily related to a reduction in operating income as a result of the decrease in our B2C revenue.

  • B2C Active Customers declined primarily driven by limited customer acquisition in Latin America and the lower volume of sporting events.

  • B2B Gross Operator Revenue ("GOR") totaled $632.0 million versus $422.8 million in the prior year quarter, a 49% increase. The increase was driven primarily by organic growth in Pennsylvania, Michigan, New Jersey, Ontario, and Connecticut. The increase in GOR was partly offset by a decrease in Take Rate driven by a decrease in our contractual revenue rates.

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