Internet gaming software provider GAN Limited has reported its third-quarter financial results. For the period ended September 30, the company posted total revenue of $32.3 million, a 7% decrease compared to $34.6 million in Q2 2021, mostly attributable to sports seasonality and lower sports betting margins than the prior quarter, despite an increase in active customers.
“Our third-quarter financial results were in line with our expectations,” said Dermot Smurfit, CEO of GAN. “Our B2B segment revenues rose 5% compared to the prior quarter, while our B2C revenues experienced seasonality following a record second quarter.”
The B2B segment revenue was $11.2 million, driven primarily by an increase in hardware sales, while the B2C segment was down by $2.9 million to a total of $21.1 million. Events during the third quarter favored customers. However, this was partially offset by organic growth in casino and poker revenues within the segment.
Gross profit was $21.5 million, down from $24.3 million; while a net loss of $7.9 million was posted, versus a net loss of $2.7 in Q2. The quarter-over-quarter increase was primarily related to the impact of lower B2C sportsbook margins. Adjusted EBITDA was slightly higher than breakeven.
Throughout the quarter, the company added the Treasure Island Hotel & Casino to its list of SIM clients, and launched Churchill Downs’ online sports betting operation in Arizona. GAN also built upon its existing relationship with FanDuel to deliver its iGaming platform in Connecticut, subsequent to quarter-end. Moreover, the business opened a new tech hub in Miami.
The last few weeks also marked a milestone for the company as the management team debuted GAN Sports, its sports betting kiosk, as well as its Super RGS platform and other new products at G2E in Las Vegas.
“We believe these initiatives will ultimately yield over $500 million of revenue by 2026 and a long-term Adjusted EBITDA margin of 30-35% at scale,” further said Smurfit. “We continue to make exciting progress in each of our business segments and initiatives and are well-positioned going forward.”
Highlights since the third quarter ended include the announcement of an agreement with Red Rock Resorts to power their online and retail race and sports betting throughout Nevada. Additionally, Smurfit announced a deal with Island View Casino Resort in Mississippi to provide retail over-the-counter kiosk-based and on-site mobile sports betting during a call with investors on the third quarter results.
“I’m excited to announce our second client for omnichannel GAN Sports being the Island View Casino Resort in Southern Mississippi,” said the executive. “It will be a new state for GAN and will shortly become our 10th state into which we have operationally deployed our technology platform.”
Additional incremental launches in Louisiana, Maryland, and Arkansas are anticipated in the coming months, which together with Mississippi will see GAN’s technology platform live across 14 states, up from just three this time last year.
“We are reiterating our full-year revenue expectation for $125 million to $135 million,” said Karen Flores, CFO of Gan on the company’s outlook for the year. “We maintain a robust cash position and zero debt leaving us in a strong position to add to our Super RGS portfolio, invest in our people and technology, launch GAN Sports and support new client launches.”
Original article: https://www.yogonet.com/international/news/2021/11/15/60190-gan-optimistic-about-future-growth–us-expansion-despite-revenue-down-7–in-q3
