Bragg Gaming Group’s Earnings Call Highlights Robust Growth

Bragg Gaming Group Inc ((TSE:BRAG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Bragg Gaming Group Inc. recently held its earnings call, revealing a strong performance despite facing challenges in the Netherlands market. The company demonstrated robust growth in the U.S. and Brazil, improved profit margins, and strong cash flow generation. Strategic partnerships and financial maneuvers further support a positive outlook, showcasing the company’s resilience and strategic foresight.

Revenue Growth Excluding Netherlands

Bragg Gaming Group reported a 27% revenue growth excluding the Netherlands, highlighting its strong performance in other markets such as the U.S. and Brazil. This growth underscores the company’s ability to thrive in diverse markets despite regional challenges.

U.S. Market Expansion and GGR Growth

The U.S. online casino market is experiencing significant growth, with a 25% increase in Gross Gaming Revenue (GGR) over the past year. Bragg reported an impressive 338% increase in GGR from its proprietary content in these states, indicating a successful expansion strategy.

Brazilian Market Launch

Bragg launched its content in Brazil on January 1, 2025, and expects 10% of its revenue to come from the LATAM region this year. This strategic move positions the company well in a rapidly growing market.

Increased Gross Profit Margin

The company’s gross profit margin rose by 612 basis points to 56% in Q1 2025. This increase reflects a strategic shift towards higher-margin proprietary content, enhancing overall profitability.

Strong Cash Flow Generation

Bragg generated €4.5 million in operating cash during Q1 2025, marking a 61% increase from Q1 2024. This strong cash flow generation underscores the company’s financial health and operational efficiency.

Caesars Digital Partnership

Bragg announced a significant partnership with Caesars Digital, involving a games development and remote game server technology agreement. The first game launched under this partnership is Caesars Palace’s signature multi-hand Blackjack Surrender, showcasing Bragg’s innovative capabilities.

Debt Repayment and Improved Credit Terms

The company repaid $5 million of its $7 million secured credit note and is securing a new credit facility with improved terms. This financial maneuvering strengthens Bragg’s balance sheet and enhances its financial flexibility.

Netherlands Market Contraction

Revenue from the Netherlands decreased by 19% due to regulatory changes such as deposit limits and increased gaming taxes. Despite this contraction, Bragg’s performance in other markets mitigates the impact.

Seasonal Decline in Q1 Revenue

Total revenue for Q1 2025 was €25.5 million, up only 7% compared to Q1 2024, indicating a seasonal decline and trailing the Q4 run rate. This highlights the need for strategic adjustments to counter seasonal fluctuations.

BetCity Revenue Dependency

BetCity’s contribution to revenue has decreased significantly, and Bragg is actively reducing its reliance on this customer. This strategic shift aims to diversify revenue streams and reduce dependency risks.

Forward-Looking Guidance

Bragg Gaming Group provided optimistic guidance for the full year 2025, projecting an 18% increase in revenue to €120.25 million and a 28% rise in adjusted EBITDA to €20.25 million. The company plans to focus on proprietary iGaming products and content as key growth drivers, with significant contributions expected from the U.S. and LATAM markets.

In conclusion, Bragg Gaming Group’s earnings call reflects a positive sentiment, driven by strategic growth in the U.S. and Brazil, improved profit margins, and strong cash flow. Despite challenges in the Netherlands, the company’s strategic partnerships and financial maneuvers position it well for future growth, with promising guidance for 2025.