Internet gaming software provider GAN Limited has announced its Q2 2021 operating and financial results, showing revenue growth against an improved net loss as operational expenses grew due to investments in talent and technology.
Total Q2 revenue came in at $34.6m (2020: $27.8m), a 24% increase driven by strong growth in the B2C segment primarily in Latin America and Northern Europe, with sports results benefiting from higher-than-expected sports betting margin.
B2B segment revenues were $10.6m (2020: $13.5m), although the first quarter of 2021 included $3m of patent licensing revenue. B2C segment revenues were reported as $24m, ahead by 68% or $9.7m. The second quarter included the Copa America and UEFA European Championship tournaments.
Consolidated gross profit was $24.3m (2020: $19.1m), while net loss was $2.7m versus net loss of $4.5m. Operating expenses increased $4.7m to $36.4m, driven by increased personnel expenses related to near-term investments in talent and technology to meet the strong demand environment.
Adjusted EBITDA reached $4.6m (2020: $1.7m), an increase that was primarily driven by higher revenue offsetting strategic investments in talent and technology.
CEO Dermot Smurfit stated: “Our business momentum accelerated through the first half of 2021, as we continue to scale the business and build significant brand awareness across our key business-to-business and consumer facing end-markets.
This was highlighted by a very strong second quarter, which included nearly 70% sequential top-line growth in our B2C segment compared to the first quarter.
Additionally, our B2B US gross operator revenue grew 4% sequentially, despite a seasonably slower US sports calendar. We have now supported 11 successful real money gaming launches year-to-date, including the highly successful and multi-faceted transition of Churchill Downs onto the GAN platform during the second quarter.”
He added: “Most importantly, we made great progress in executing our long-term growth strategy during the first half of the year. This included significant development work in the integration of our new sportsbook engine into our B2B product suite, which we plan to debut at Global Gaming Expo this fall. It also was highlighted by two exciting, exclusive content deals with Ainsworth and Incredible Technologies.
“We continue to emphasize the importance of possessing exclusive content and an industry-leading library of the most recognizable and popular retail games. These efforts and agreements will allow us to grow our take rate from US igaming revenue and position GAN as a content supplier of choice for large operators with diverse content line-ups.”
The firm also reported gross operator revenue of $221.4m (2020: $214.2m), up 3% driven by the strong performance of GAN’s new and existing client partners, most notably in the state of Michigan.
On the outlook, CFO Karen Flores said: “Our strong second quarter financial results were in-line with our preannounced expectations in early July and support our confidence behind the decision to raise our full-year revenue outlook to between $125m and $135m.
“We remain in a strong financial position as we support new and existing customer launches, pursue our content acquisition strategy, grow our team and evaluate new geographies. Looking out to the second half of 2021, we expect continued strong performance from our B2C segment – particularly in Latin America and Northern Europe – as well as from our B2B segment as we gain new client wins in major markets.
“We also expect improvement in our profitability metrics as revenue growth begins to align with the increased scale needed to support our expanded operations.”
