GAN Limited Reports Improved Financial Performance for Q2 2024

Financial Highlights for Q2 2024

For the second quarter of 2024, GAN reported a total revenue of $35.6 million, reflecting a 5% increase compared to the same period in 2023. This growth was largely driven by the company’s B2B segment, which saw a revenue increase to $13 million from $9.9 million.

The expansion of B2B offerings in Nevada and revenue recognition related to the exit of a B2B partner in Michigan were key contributors to this growth.

In contrast, the B2C segment experienced a slight decline in revenue, totaling $22.6 million compared to $23.9 million in the previous year.

While European markets saw increased player activity, this was offset by reduced activity in Latin America and lower margins due to unfavorable event outcomes.

Operating expenses for the quarter were significantly reduced, coming in at $25.1 million compared to $32.8 million in Q2 2023.

This decrease was largely due to ongoing cost-saving initiatives, including reductions in compensation costs and headcount, as well as lower depreciation and amortization expenses following the full amortization of certain intangible assets in the prior year.

The company reported a net loss of $1.7 million, an improvement from the $18.4 million loss in the second quarter of 2023. The reduction in net loss was driven by increased revenues and lower operating expenses. The prior year’s figures were also impacted by an $8.8 million loss on debt extinguishment.

Segment Performance and Adjusted EBITDA

Total segment contribution for the quarter was $25.3 million, up from $24.3 million in the previous year. The improvement was primarily driven by the growth in the B2B segment.

GAN’s adjusted EBITDA also saw a positive turnaround, reaching $3.7 million, compared to a negative $2.0 million in Q2 2023. This increase reflects the company’s successful efforts to increase revenues while managing and reducing costs.

The company’s B2B Gross Operator Revenue, which totaled $609.3 million for the quarter, represented a 40% increase from $436.0 million in the prior year quarter. This growth was primarily driven by organic expansion in key markets such as Pennsylvania, Michigan, New Jersey, Ontario, and Connecticut.

Strategic Outlook and Upcoming Merger

Looking ahead, GAN remains focused on optimizing its cost structure and rolling out product enhancements to further improve profitability. The company is also working through regulatory requirements for its planned merger with SEGASAMMY, which is expected to close in late 2024 or early 2025.

Seamus McGill, GAN’s Chief Executive Officer, said, “I’m very pleased with the continued operational progress the team is delivering. We achieved top-line revenue growth in the second quarter while reducing our operating expenses. We continue to operate the business more efficiently with a focus on improved profitability.

“Looking ahead, our focus remains unchanged. We will continue to optimize our overall cost structure and roll-out product enhancements. We continue to work through the gaming regulatory requirements for our planned merger with SEGASAMMY and anticipate a successful closing in late 2024 or early 2025,” added McGill.