Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| Our sports betting technology capability and particularly our retail sports betting technology carries a favorable economic model |
| and selected international markets for B2C where we are best positioned and see clearly attainable path to profitability |
| The B2C division, as I said on the call, we entered the second quarter with great run rate, great growth, all time record NGR and activity |
| So super positive rollout, it was weeks, not months to get the retail operation stood up, which is super exciting retail scales and deploys very, very effectively and very well in states where we are licensed |
| I'll also take the brief opportunity to highlight our B2C divisions significant value proposition with revenues of nearly $90 million last year and an all time revenue record in our largest B2C market achieved last month speaking to the underlying growth opportunity ahead of us |
| The first early indicator of that was really the very positive reception by our client Wynn Resorts and a lot of other people in the industry paying attention to the rollout by GAN or GAN Sports or Wynn Resorts in Massachusetts, not just the very fast rollout of retail, but the day one successful launch of online sports for Wynn in Massachusetts on March the 10th in the first quarter |
| Finally, our largest LATAM market had a record April in net gaming revenue partly driven by new soccer team sponsorship, which appears to be delivery ahead of expectations in a tough and competitive climate |
| And I believe that B2B partnership has an exciting future as we roll out together across the nation |
| In the first quarter therefore, we made solid progress in executing our strategy in such a way that we are confident we will ultimately drive revenue gains and reduce our cost structure |
| that puts us on a significantly stronger financial footing |
| But the indicators in the current quarter and looking forward through the year are very positive |
| So, very excited about the B2C division and the return to growth prospects after a relatively pedestrian growth performance in 2022, which is behind our expectations |
| So we're going to continue to optimize the product, but the product itself, coolbet.com has been extremely well received in all the Latin American markets that it's rolled out into, and we expect and anticipate same team will continue to achieve market penetration and market growth rates in the Mexican regulated market, which will align with our previous experiences in that particular region |
| So very positive indications of growth that in Latin America |
| We saw strong KPIs this quarter with new customer growth of over 10% continued low customer acquisition costs and encouraging, but still very early initial metrics out of our recent entry into the Mexican market |
| I remain excited about the opportunity ahead of us |
| I mean we're very happy with the direction of travel with our B2B and GAN Sports through the balance of this year and we see significant growth in adoption rates and demand |
| In the wake of the World Cup nearly 40% of new customers acquired during that soccer tournament, were retained on coolbet.com, which recently benefited from major soccer sponsorships in key Latin American markets, which appear to be performing well with an all time record in revenues and active players last month pointing towards a solid return to growth for our B2C division |
| The underlying Key Performance Indicators or KPIs excluding the take rate were very strong across both of our operating segments |
| This past quarter, we've made strong strides to shore up our balance sheet providing financial flexibility to profitably grow our business |
| B2C KPIs remained healthy post the Soccer World Cup with double digit or 12% growth in new customers, and importantly, our marketing spend ratio remains well below U.S |
| Moving to Coolbet's growth in Latin America, it's clear that our strong performance during the World Cup has allowed to grow our presence in these markets |
| Adjusted EBITDA was modestly positive as cost saving measures will set the decrease in our revenue |
| We're making great strides to reallocate resources to our higher return opportunities to diversify our revenue base and transition to our new technology platform that will meaningfully accelerate our scalability and improve our cost structure |
| To wrap up, I'm confident in our go forward strategy to drive revenue growth with B2B sports and B2Z growth in LATAM |
| We believe these changes were truly a great outcome for GAN and its stakeholders |
| The amended Ainsworth exclusive IME content distribution partnership reduces our future cash commitments by $15 million and our successful refinancing transaction provides a much greater financial flexibility and approximately $4 million in reduced annual cash outflows over the next few years |
| As we go through the process, our collective belief remains unshaken that there is significant unrealized value in our proprietary technology offerings that encompasses omni-channel sports, PAM and leading iGaming aggregation, our patented IP and a growing profitable B2C business |
| Notably, this ratio is even lower for Latin American markets, which is a key focus of ours to drive profitable growth in geographies where we see better return profiles from customer acquisition marketing |
| We have a very large number of markets going live this summer for Wynn Resorts, which is very exciting |
| Statement |
|---|
| While our first quarter revenue results are bit lighter than our expectations |
| So getting into the first quarter results, we generated revenue of $35.1 million, which was a decrease of 6% from the prior year quarter |
| The decline was primarily related to a decrease in our contractual revenue rates with the client in the B2B division, which correspondingly decreased our overall take rate for the B2B division |
| Lastly, we ended the quarter with $40.8 million in cash, down from $45.9 million as of year end driving primarily from changes in working capital |
| This is primarily attributable to a decrease in our take rate as described earlier |
| We are unable to provide forward guidance at this time given the nature of our strategic review process |
| So again, hard to be specific in the questions and I accept and understand the frustration |
| Want to start, so you guided for Q1 one day before quarter end on March 30th, and you missed the loan by $2 million |
| We also elected to exit our B2C division from the highly competitive Ontario, Canada market in order to deploy our marketing capital in faster rate of return markets available to in Latin America |
| We also note that FX in the quarter did not materially impact us as the majority of our foreign revenues and expenses are lined and constant currency exposure was a wash on earnings |
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