At its earnings call on Tuesday, Bragg Gaming revealed it is forming a new ad hoc special committee to determine its best path forward after a mixed set of results for Q4 clouded an otherwise promising year.
In the fourth quarter of 2023, Bragg reported dips in both revenue and profit. Overall revenue dropped slightly by 1.4% to €23.4 million ($34. 5 million CSD) and adjusted EBITDA fell 23.7% to a total of €2.8 million ($4.1 million CAD). Gross profit slipped 7.3% to €12 million ($17.7 million CAD) during the quarter and is also down 3.4% year-over-year.
The biggest bright spot in Q4 for the Toronto-based global B2B gaming technology and content provider came from wagering revenue, which rose 18.1% to €6.1 billion ($9.0 billion).
Meanwhile, the company’s full-year figures painted a rosier picture as revenue rose 10.4% YOY to €93.5 million ($137.6 million CAD) and adjusted EBITDA jumped 26.3% to €15.2 million ($22.4 million CAD) last year. Again, wagering revenue led the way by recording the best results for the full year, a climb of 26.6% to €22.4 billion ($33.4 billion CAD).
In 2023, Bragg launched 29 new proprietary online titles worldwide, including 26 newly introduced to online European casino markets and 15 rolled out in North American markets. Bragg CEO Matevž Mazij said on Tuesday that the company expects to “maintain or exceed this pace” in 2024.
In particular, Bragg signed content distribution agreements with brands including Betsson, 888/William Hill, and PokerStars, as well as launching content in new regulated European markets and rolling out with multiple U.S. operators such as BetMGM in New Jersey. In the U.S., revenue increased by 17.5%, which Bragg attributed to launching with new partners and therefore growing its overall presence on the continent.
Bragg reviewing strategic alternatives
After the Q4 dip, Bragg has formed a special committee, chaired by independent board member Don Robertson, to be utilized when the company deems it required or necessary to undertake a review of its strategic alternatives.
Potential actions include the sale of the company or its assets, a merger, financing, further acquisitions, or other strategic alternatives. Bragg gave no timetable to complete the strategic review process and stressed that no decisions have been made and there’s no guarantee that any transaction will be completed.
Recent months have seen a spate of sales in the North American online gaming market and just last week, reports broke that Rush Street Interactive, the operator of the BetRivers brand, is considering selling to a giant like DraftKings.
Back in late November, key Bragg investor Jeremy Raper of Raper Capital wrote an open letter to Mazij urging that an imminent sale of Bragg’s “highly desirable, unique suite of iGaming content and distribution assets” would deliver “a gargantuan premium” to investors.
Forecasting the future
Looking ahead to 2024, Bragg projected that it expects to report midpoint growth of 12.8% in revenue and 10.9% in adjusted EBITDA.
“Our strategic actions have positioned Bragg as an essential content source for leading international iGaming operators, strengthening our groundwork for consistent and profitable development,” added Mazij. “With confidence, we affirm our readiness with the appropriate strategies, financial strength, and infrastructure to maintain our business momentum while executing initiatives that foster cash flow growth and generate added value for our shareholders.”
The company has already taken steps towards further expansion recently.
Last week, Bragg announced it has been approved to provide casino game aggregation in Peru as it looks to establish a presence in the Latin American regulated market.