Bragg Gaming Group Inc ((TSE:BRAG)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Bragg Gaming Group Inc. revealed a generally positive sentiment, underscored by strong growth in key markets and a successful diversification strategy. Despite challenges in the Netherlands and potential impacts from customer migration, the overall outlook remains optimistic due to impressive growth metrics and strategic diversification efforts.
Strong Revenue Growth in Key Markets
Bragg Gaming Group reported remarkable revenue growth in key markets, with an 86% year-over-year increase in the U.S. and an 80% rise in Brazil. These markets have been pivotal in driving the company’s 35% year-over-year growth in proprietary content revenue, showcasing the effectiveness of their market strategies.
Increase in Gross Profit and Adjusted EBITDA
The company saw a 5% year-over-year increase in gross profit, reaching EUR 14.7 million. Adjusted EBITDA also grew by 9% to EUR 4.4 million, with margins improving by 100 basis points to 16.6%. These financial metrics highlight Bragg’s operational efficiency and profitability.
Diversification Strategy Success
Bragg’s diversification strategy has proven successful, with revenue outside the Netherlands growing by 20%. This indicates the company’s ability to mitigate risks associated with market-specific challenges and underscores the strength of its strategic initiatives.
Credit Facility with Bank of Montreal
Securing a Tier 1 credit line with the Bank of Montreal has enhanced Bragg’s liquidity and lowered borrowing costs. This financial maneuver provides the company with greater financial flexibility to support its growth initiatives.
Revenue Decline in the Netherlands
Revenue in the Netherlands experienced a 22% year-over-year decline due to regulatory changes, impacting overall revenue growth. This highlights the challenges Bragg faces in adapting to regulatory environments, though the company’s diversification strategy helps offset this impact.
Customer Migration Impact
Bragg anticipates the migration of BetCity off the Bragg PAM in the first half of next year, which may have a minimal impact on the bottom line. The company remains confident in its ability to manage this transition effectively.
Forward-Looking Guidance
During the earnings call, Bragg Gaming Group provided forward-looking guidance that indicates strong financial performance and strategic growth in key markets. The company highlighted a 2% year-over-year revenue increase to EUR 26.8 million, with a significant 20% rise when excluding the Netherlands. The U.S. and Brazil continue to be high-growth markets, contributing 22% to total revenue. Bragg reiterated its full-year 2025 revenue guidance of EUR 106-108.5 million and adjusted EBITDA of EUR 16.5-18.5 million, driven by its diversified and high-margin proprietary content strategy.
In summary, Bragg Gaming Group’s earnings call reflected a positive sentiment, with strong growth in key markets and a successful diversification strategy. Despite challenges in the Netherlands and potential impacts from customer migration, the company’s strategic initiatives and financial performance suggest a promising outlook for the future.