GAN Limited (GAN) Misses Q3 EPS by 16c; Offers FY20 Revenue Outlook

GAN Limited (NASDAQ: GAN) reported Q3 EPS of ($0.14), $0.16 worse than the analyst estimate of $0.02. Revenue for the quarter came in at $10.03 million versus the consensus estimate of $10.04 million.

Third Quarter Highlights Compared to Prior Year Quarter

• Quarterly revenue of $10.3 million, up 86% from $5.5 million
• Real money Internet gaming (“RMiG”) revenue of $7.7 million, up from $4.1 million
• Simulated gaming revenue of $2.6 million, up from $1.4 million
• Gross profit of $6.4 million, up from $2.4 million
• Net loss attributable to equity holders was $4.1 million, or $0.14 basic and diluted per share, compared to net loss attributable to equity holders of $1.8 million, or $0.09 basic and diluted per share
• Gross Operator Revenue(1) increased 76% to $142.3 million
• Active Player-Days(2) and Average Revenue per Daily Active User(3) (“ARPDAU”) increased 38% and 27%, respectively
• Adjusted EBITDA(4) was $(0.1) million, up from $(0.4) million
• Pending acquisition of Vincent Group p.l.c.(“Coolbet”) for €149.1 million, a best-in-class RMiG platform with both Online Sports Betting (“OSB”) and iGaming offerings, and a diversified revenue stream across Northern Europe, Latin America and Canada

Dermot Smurfit, CEO of GAN stated:

“We built strong momentum in the third quarter and our results were in-line with our expectations. We added multiple new RMiG and Simulated Gaming customers over the last several months, demonstrating the unique and highly differentiated capabilities of our SaaS platform for integrated iGaming and Online Sports Betting. GAN continues to prove it’s the leading partner of choice for land-based casinos through an expanding solution offering, that allows our customers to quickly and efficiently expand their reach across the online gaming space. Our new customer pipeline in the U.S. remains strong and we’re building exciting relationships that we believe have the ability to scale across our customers’ casino portfolios as more states come online in the future. Our business remains strongly positioned to leverage the momentum of online sports betting and iGaming, which is clearly accelerating across the globe.”

“I am also excited to announce the strategic acquisition of Coolbet, as we continue developing and investing in our capabilities. Coolbet is a best-in-class RMiG provider, with both Online Sports Betting and iGaming offerings. The acquisition will allow GAN to provide near-turnkey capabilities in Online Sports Betting, rounding out our B2B platform offering in the U.S. We view this acquisition as the next strategic move in our growth strategy as we look to diversify our business model and geographic exposure. Enhancing our B2B platform with Coolbet’s solutions will allow us to leverage their proprietary OSB technology, engineering and know-how. We look forward to welcoming the Coolbet team to GAN and have already started to work diligently around our integration plans as we look to finalize the transaction over the next few months.”

GUIDANCE:

GAN Limited sees FY2020 revenue of $37-39 million, versus the consensus of $38.11 million.

Dermot Smurfit, CEO of GAN concluded:

“We look forward to the potential launch of multiple customers in Michigan, which are anticipated to go live in December. We are reiterating our previous outlook of $37 to $39 million in revenue this year, which includes IP licensing related deals subject to timing variability. Our pipeline remains robust, and we expect to see gross operator revenue accelerate as we progress through 2021. We also look forward to finalizing the acquisition of Coolbet in early 2021 and believe it will bring advantageous scale, geographic diversity and opportunity, as well as near-turnkey capabilities in Online Sports Betting that will help us further differentiate and enhance our U.S. platform. We remain confident that our unique position, differentiated solutions, strong management team, and solid financial position will enable us to continue to grow throughout 2021 and beyond.”

For earnings history and earnings-related data on GAN Limited (GAN) click here.

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