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GAN Limited (GAN)

Participants
Bobby Shore Vice President, Investor Relations and Capital Markets
Dermot Smurfit President and Chief Executive Officer
Karen Flores Chief Financial Officer
Chad Beynon Macquarie Group
Ryan Sigdahl Craig-Hallum
David Bain B. Riley FBR
Greg Gibas Northland Securities
Call transcript
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Bobby Shore

Thanks, Doug, good afternoon, everyone. GAN’s first quarter 2021 earnings release was issued today after market close and it’s posted on the company’s website at gan.com. With me today are Dermot Smurfit, President and Chief Executive Officer; and Karen Flores, our CFO. Please note, we’ve provided a set of PowerPoint slides that will accompany our prepared remarks.

You may access these slides in the Investor Relations section of our website. X Safe Page disclosure. on start with Harbor our We’ll any except remind actual in We that guidance involve including that forward-looking to and difficult consist that, be the and for provided, to call, risks, contained would like statements information to you predict. the of related today, statements conference assumptions uncertainties financial are made does a identify Words statements in as is prospects, as forward-looking but looking. and statements, well expressions that reflecting optimism, satisfaction not their forward not absence future statement with tense, mean current the

statements as by differ Forward-looking to such a of forward-looking the future cause risks should subject and could suggested results are or materially as statements. results, from guarantee actual not be performance that uncertainties those interpreted performance expressed statements to or or in

are that the filed on Some could in section GAN’s XX, differences March at such cause XXXX. annual discussed of factors Form report Factors Risk important XX-K

the no statements made, only forward-looking are securities date statements factors Forward-looking statements as affecting actual reflect information, changes to to statements obligation assumptions in results, changes other to by extent of applicable speak required or the laws. the in assumes update except company the forward-looking

confirm discussion accepted Dermot. floor of press America website. call, over the the for directly and U.S. be the available both investor will release of measures like the which appendix the go remarks. do principles, non-GAAP GAAP. presentation I’d Please Smurfit Dermot included to to Reconciliation some With in our this the U.S. GAAP are tab in ahead, most opening or comparable issued are in to of accounting that, a there Investors that items not turn the morning, During United of measures to generally of States of these

Dermot Smurfit

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Karen Flores

Dermot you, hello everyone on and today. the Thank call to

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results, briefly changes key presentation I QX me the Before let summarize jump our statements. of into financial in

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our financial a purchase consolidated create Coolbet impact associated excited XX. million, report period. XX.X first performance revenue to on now our XXX% total a acquisition with assumed Coolbet a increase Slide collectively was final which in have value we acquisition, both quarter discussion of year Additionally, results will now results liabilities I’m the fair of to the which in year-over-year which the to turning the in XXX very of strong the of current price includes the of And drove assets segments, acquired and million.

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Dermot Smurfit

our results today better is in These incredible to winning technology by GAN is profitability up expanded Thanks, scarce stand will open current tournament’s in We remarks. any kick global we Ainsworth’s which our and our BXC, betting our GAN’s continue U.S. and quarter’s and now GAN the anticipate should the stakeholders. the our ultimately sport counteract recurring that for will And for scalable We strong point and all recent reach. efficiently off for Karen, strong June, growth, of That at driven offering team helping as momentum we just business now continued value a will our maximize exclusive our turning new opportunity reflecting BXB history. concludes There offering. execution client in strong base. portfolio. Sports and the calendar with put, and internationally major talented content include results slot sports its first will slower line Slide Simply than strategy seasonally clear we model, and as questions. in XX. quarter past delivered yield to continue clients this highly BXB expand shape

Operator

from your with of Group. Macquarie with Our comes Instructions] question. proceed first Chad question Beynon line Please [Operator the

Chad Beynon

question. Nice the Hi, for and taking thanks Wanted start afternoon, Karen, results. on Dermot my guidance. to good

– strong. in public at mentioned based on we’re or noted no very in what April the there’s out guess seeing data be numbers that Michigan iGaming and slowdown this as Jersey, you And of based you’re continued what like point. I your markets So seeing New you to on

the help then beat about into Anything and to $X can that positive negatives, how March So at million of the we us thought about first guidance? in annual that should end that the you. the last when revision works be how you throughout or how – year, quarter? annual thinking the you positives million out and to $X Thank you think were gave different guidance your else this that the

Karen Flores

David. Yes. Thank you,

course, our during So company is being the part of remarks sports that, of mentioned seen be revenues. we XX% volatile. BXC that Dermot’s quite total sport have Coolbet of now of And can the side through we

our And so we have case included a guidance. base in

the of woods as fact So the completely COVID. not we’re to that, out we’re consideration into that with as taking yet respect well

through things are those cautiously we So the quarter. second watching

a reiterated guidance scenario. base Our that is case just we

of are BXB we do upside. on we’ve patent mentioned not And as So content well as licensing we sports, depending include could where there execution areas GAN be the in do guidance. that course, those think before, our deal, of as

were end a between patent And increase from so the if anything and year happen an of that now the to be would as well. perspective, licensing

Chad Beynon

you’ll And kind you you talked acquire and help near-term position And what’s in the have full able around the about obviously company for provide talent there color team opportunities. in out you that of how more EBITDA business? just any the will think the to sacrifice you terms the if that will of do the Thanks. investing some then can are point technology about talent Great. and You comments in you’re place? of future? thinking Thanks. But at what

Dermot Smurfit

Yes.

kind you’ve self-answered a to Chad, So degree. of

list money kind choice future U.S., capturing people industry I internally. big in gambling only in a reevaluated which ball to client competitive at all at really market to of be basically growth where relationships or relatively And this interesting of reflects as we talent clients then the leveling interestingly, sat the pretty share, BXB in the an the which think in as in time a investing that all as board, organic need complicated in team far provider. not a and maybe for platform just asking up had replacement more go again, everybody engaged getting in are right a secondarily, existing has simply it’s about overall. is whether do, capability have opportunities, long-term So This I individual surprised state these real opportunities on we’ve suddenly and been marketplace, jump the point understanding certain actually to their surge the stuff of thought somebody’s which the is you’ve of scenarios, multistate think, at how multistate. is an in but multistates, growth our alternative And multiyear heart single-state

it’s a And multiple go-to the incremental to to become live BXB solution upskill, demand over next right that’s team, what, the has two client months sorts. surge or are risk in think proven two. quarter the or state that of us and of some default marketplace. operationally It we to additional the quickly in new that’s GAN been platform And I on any going So you we’re having squad rather address. time, switch and getting for absolutely a perhaps not takes six go, to even typically know engage, an a decision need launch course launch, individual of

about online but unless view within a BXB capture also responding up six today’s fleeting for again disappear our absolutely just ready in being client and resourcing they of them able come these from way from are it’s four platform new grabs you to months. before momentarily really opportunity bringing and opportunities capable So not that to such clients, existing

Just can of of where January. a major in win as last live that contract signing was a three in one we and them client deployments. you see And us in did getting September year Michigan, just

open we clients BXB and So have miss new very are to expect business that really, it’s much opportunities. ensuring And for about don’t we these extraordinary so, we imminently.

Chad Beynon

to Great Dermot. the quarter. Congrats Thanks, hear. on

Dermot Smurfit

Thank you.

Karen Flores

Thanks, Chad.

Operator

proceed Ryan comes question next Sigdahl from Please of Craig-Hallum. question. your line Our with the with

Ryan Sigdahl

incremental my Karen, fiscal questions. online you the are distribution agreement? is agreement taking included XXXX that IP? contribution years. much over in for on acquiring you five mentioned $XX in is Ainsworth Thanks guys. Or start? you agreement, exclusive afternoon, the And that how then mentioned, then Good guidance? the million And an secondly, Curious What revenue it does of

Karen Flores

Ryan. Yes. Thanks,

as on the of part early starting we let quarter. as deal points strategic the point, it comment we of Dermot third I’ll as the far as launches But well. So for the some assuming mentioned, are that

guidance. will, get low into we single as in sea that’s that let’s million you So number there’s again, we a have included in our Again, upside the get really legs, potential as is, if say, included and case there base current guidance. the a deal

to should we’ll evaluating able really So about the be be it on on earnings early the talk call. that in more and quarter next

Dermot Smurfit

it’s on the Ryan, stuff. exclusive Thanks. strategic Yes, distribution.

exercise that the online distributed course them of getting major the that for kind back-scratching Moneys property. the build of they’re many scaling year. should We’re close XX the the that any rolled content the of Ainsworth sense an get that out slots the terms. quickly is even This not just of be to that potentially right? the acquiring team they up gaming a XXX, iconic, out And with in Reels intellectual Roaming over focus of continue deal the to more end at online to they’ve floors recognizable, the Ainsworth tech Mustang They’re going than titles, titles across slot is of and well in and another to their XX retail got about are like all think And boat scaled portfolios. of game This that world. and I is individual mutual to positioned titles in on incredibly popular And portfolio, U.S.

of And going clients think RGS. and a exclusive we an the to clients it’s much to super here lot very advantage in BXB So competitive distribution, future our U.S. our platform confer specifically of

Ryan Sigdahl

Maybe previous a but on range. the of $X follow-up, of guidance, end on question million each Chad’s by guidance top on you raised

million. You just your beat $X range by QX,

that, as you at the of couple week, well expectations. gave just upside end mentioned here as to when well said incremental, relative the the significantly Ainsworth basically exceeding kind in for Michigan You million you of as quarter a of last as

there I guess well? as the I’m that offsets what Or missing? isn’t what are So going

Karen Flores

Yes.

guidance, So also risk on relative again, look to at Coolbet we on we’re the looking when we acquisition just sportsbook. potential the January at closed the And X.

be quarter, favor. a timeframe. in we’re with going first volatility we the we’re it March the So it’s June in it of the our for it And continuing When midst on to of bit there. into good But in course, there the event we’re Copa ended Madness at equivalent and basis, understand sort we’re monitor. week-over-week looking something a can of that of

going at to around trends really that, the how and that the sportsbook. be that could And so the looking exist gain is that, comfort volatility managed to with more associated we’re in

Ainsworth scenario. Ainsworth there, working hedge of time. bit right that So we’ve that’s a a and respect a you from base look just, items some on With and the other mentioned, that it of again, now a case for at long deal is we been little to the

what’s So on the million new business guidance million assume original of into of $XXX projection. to $XXX go the we I put course, it was the in ins included originally and quarter. again our won’t outs But we out when in of projection. first our all

it, monitor call. continuing we’re the next to again, and on we’ll the update market So

Ryan Sigdahl

recent given they’re going and Wynn a its And in-house share They Games BetBull. then the proprietary other use to tech just switching you also Scientific over. cetera. mentioned in have They capital have significantly there, with marketing states. also SPAC, They think the market merger et to Curious accelerate how a spin-out about few opportunity gains, lot. interactive, more

there, and puts the you how of expand kind opportunity other to takes in and relationship Just states? view that

Dermot Smurfit

Yes, shout-out incredibly Thanks positive, Ryan. on the for that.

front the integrating of process the end. in actually We’re

number talk of has technology, platform the they proprietary as that a they launched. front-end Wynn GAN it app point that’s actually, to the And out that And when BetBull’s and about already for. been top on been just of other of Wynn. has I think factors integrated respected well-known very I mobile in talk sit about states do

they’ve of is last first year. of program. up patents they for comment that place. the September the numbers the the contract comes The chest a XX in million and licensed They’ve the most brand. important our talking after the part podium, one to to as that a capital deal Wynn’s and domain. It’s any and special be they been casinos would to in raised other significant other to public this That’s rewards go in brand financial for any to comment any the at a When be operator to BXC we’ve run but it the have We’ve other reward the are online for provide state. other to a of in very seen database. beyond is executives wouldn’t members this appropriate it launched outperform that certainly any market, have, casino the I war this clients in me opportunity the online brand mean integrate

Ryan Sigdahl

remind you get how of the kind agreement? includes, included users, Yes, what then it what me of to was was that more how that if that’s can license patent in more long it quantified? going then upside is helpful. initial part states they get And certainly Wynn, Curious, with if was, there’s Yeah, they’re aggressive. what

Dermot Smurfit

XX-year launch. a commencing deal It’s from Yeah.

out year. one, to we’ve us. to and contract day launched quickly this take we the patent a would to just in extends not of the only January Michigan the enabled gate. in of certainly, of hope The share speak reasonably Michigan. I encompass interesting there market would So terms be but only license kindly pretty they them of operations And on

strong of very to very, see excited at what we’re and point, collaboration next. happens relationship So this

Ryan Sigdahl

hop back I’ll luck. good and Thanks, Great. in queue.

Dermot Smurfit

Thanks Ryan.

Operator

question. Bain from David B. Bain, of Riley Please David your with is FBR. Our live. line next question comes proceed line the your with

David Bain

I’m for that. sorry

right on on was mute. opportunistic players, continued Understanding of And quarter you’re look as with something cash can some not core split? deal course, going of at and, this tuck-ins the purchase even strategy? exact forward? exclusives content, one Ainsworth an of that forward should anticipate the understanding give I we structure, component ongoing we as a unique Sorry, going with either amount, or Congratulations sort larger Ainsworth. either or can disclosing you color or what either upfront on acquired some us like Is

Karen Flores

won’t I and call David, you, Chad. you Thank Yes.

David Bain

on to want I Chad be weekends.

Karen Flores

be see we want content progressing overheated we ago it. that the bit. in We strategy think, a that little take focused we year are, far and course, Of on do going that stated to we’re a the market as valuations M&A as

so an M&A. approach taking for alternative least include, that And really, now, wouldn’t we’re necessarily at

want U.S. we it definitely of I’ll continue out on piece content, start market. that at be the can deals we’re is with attractive. So licensing that proven solutions big what and where going are in we tuck-ins, focused we the looking think to smaller building just the potential And we’re acqui-hires this, content be is opportunistic to relative a to reiterate O&O to content, then

that content of is resonates. available we lot a necessarily is internationally, there it don’t but So think

content. strategy And so very-focused we do have on U.S.-proven a

the there Ainsworth over associated commitments yes, It’s to cash respect with deal. it. So the are course specifically, deal of the with

just those the are very reveal say to expecting going specifically. terms return not investment we We’re would on I again, But there. a high

David Bain

Right.

in they patent versus follow-up be Wynn acknowledgment my balance patent to that online what – – would this see for your GAN see coming continue But straight in with for bit. And discussion then of is more? value-add spoke levering there little bigger operators are to invest just that is a the discussion the client that of what’s the you or more on and patent technologies And with great. from on balance for you gauging now generally, core picture hybrid, wagers Okay, a licensing? between incorporation

Dermot Smurfit

continue compete already that to recently who against program implemented and Yeah. players. framework Well, even relatively at aggressively casinos the multiple active operators the there’s year-to-date, has that anything, been the understanding states if data their have BXC always delivers heart to iBridge capability. patented always of will ability to of or the think plenty ability of value at retail their in online-only sit rewards points enhancing, We the of

an So of asset incredibly strategic it’s important ours. intellectual property and

even within to I in there intend think measured property industry. always way. And merits intellectual a is to enforce is be not is balanced it to or a an of that well-known and the And property we in today. licensing the appropriately continue act, balancing on here infringing people very U.S. press the it need licensing the on who may intellectual patent may

conservative. very we’re So

online We’re patented But gambling licensed in very the flexibility. enhanced a the to capability opportunities and today. it rate, exists and most real world at careful. with the important value. We retail respond to a and priced the actual that sure, is of We it degree market piece for know crossover between probably technical this continue we’ll of

David Bain

you. Thank okay. Awesome,

Operator

instructions] [Operator your next from the of you. question question. comes Gibas Thank line Northland with with proceed Our Securities. Greg Please

Greg Gibas

your Thanks and the and internal questions, the outperforming Hey, BXC for good mentioned expectations. Coolbet strong afternoon taking the guess, you on Dermot Karen. offering of I congrats results.

more what if sustainable you what better-than-expected you then maybe wondering, about be strength Just that and discuss a I little expect could that bit to to forward. drove going outperformance, guess, whether degree,

Karen Flores

Yeah.

particularly that in that it had continues to would outpace Latin it growth where secular we they’re seeing, America, the originally So thought be.

incredibly model, scaling really they an cost they’re great. acquisition social have excellent job that product, low effectively business. So They doing do and an of

in seeing the of the it quarter. the at specifically, they’re end again, margin a markets traction lot the And our in competing manage in they that just we’re of So that sports lot terms worked of way favor a out plurality, in. of the

that’s there guide top waters really put we’re base we the the get that. of further our we’ll what as associated case we’ll appropriately. and And it, so sure we’ll – that with that according the comfortable it. us to kind with make they’re risk over But again, managing into And test

Greg Gibas

I notable up you specific mentioned follow positive could could that you this maybe what would want expect discuss don’t I EBITDA trend drivers adjusted if but just guidance, maybe to changes wondering And and if you here, to know you see how the year. you operating too be forward great. I going this or year. on are expenses Okay, was

Karen Flores

front investment talking So that we launch demands of we’re expect run and teams the that staffing operating further lot is expenses really a additional about to around to as seeing. we’re

few is pipeline ago six the staff where, us, And speaking, to seeing, months we’re there takes would the in slight opportunities even where maybe it about of of So that generally I a single-state, more just deals, a more months fully were we it the more about technical, team. more a what sales shift are say, seeing way are because launch talking toward lot takes complicated. multistate now which resources. And a of we’re shift way

last our opportunities. able replacement not way we to months. platform for also so those new had are coming the envisioned set And want meet are are demands. we these opportunities to These that or originally opportunities be just out few that that Again, are

to continue we tap like really feel it’s So that. important to

controlled as that see focused the to But a I going also little said, relative to are efficient headcount. operating tick on we’re We expenses growth up growth, bit.

today. to are those that costs labor managing as markets we appropriately we new not look So in potentially in we’re staffing

So year. the spend. expect it’s evaluation it off of make is to of level to something end And efficient under do an it we toward sure the that’s use

Greg Gibas

I appreciate Thanks. Okay, additional good. color. sounds the

Operator

queue. questions for closing further remarks. no Mr. like hand back Smurfit I’d to the call are to There in the

Dermot Smurfit

and now today Thank investors growth who we over clients industry. delivering for sheet burstable reduced we engineering through leadership international exciting We control both with have a as us strong quarter got We’ve in solid winning bandwidth our continuing all for of look to long-term Accordingly, have and gambling progress you deeper We’d in like and first balance backed BXB and clients. U.S. forward, domestic execution client America’s who problem. BXB is joining market strong and to now our to our market concentration. young required first-quarter for going our resources a position. are thank good of the the firm No the our forward share all another business year our continue of our stable visibility which earnings. for yet online

again well. in August. Be time. your all with for Looking forward to speaking you Thanks