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GAN Limited (GAN)

Participants
Robert Shore Head of IR & Capital Markets
Dermot Smurfit President and CEO
Karen Flores EVP and CFO
Chad Beynon Macquarie
David Katz Jefferies LLC
Ryan Sigdahl Craig-Hallum Capital Group
Call transcript
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Operator

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to GAN's Q1 2022 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Robert Shore, Head of Investor Relations for GAN. Thank you.

begin. may You

Robert Shore

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Dermot Smurfit

results both segment. BXC our first and the segment software and slide join our presentation discuss Thank BXB quarter me international our encompassing good segment enterprise you, on of Please performance gaming everyone. financial operating XXXX internet fourth Bobby, to afternoon, and the

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Karen Flores

Thank everyone. and Dermot, good afternoon, you,

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Operator

question from Beynon Our [Operator Macquarie. Chad Instructions] is first with

Chad Beynon

for Hi. question. Wanted for and about Good my taking thanks afternoon to talk second. Ontario a

about from for the a there's near-term then or You just or expected, if could like to sounds It as the you're in terms .country. And quarter? little acquiring what pretty customers of could operators well. in impact? .com is you impact be second from spoke a Coolbet in bit transitioning the kind Wondering transition .country, the more if the standpoint, a Thanks. customers market of the near-term are wondering But less competitive market? expand just

Dermot Smurfit

Thanks, Chad. on first, comment question pretty and much market last invite of I'll take the the to expected. then the first. But part Karen the is as

to place been up. betting when in and nearly Jersey. happy ramp Our ranked very with launched the initial client New in of state similar sports the we're around appears to XXXX third iGaming and market ramp It's September be up online we the

of be at efficient been I the a in native is all other some operational positive Coolbet currently BXB in wings Karen, the out and the app that's point has we're which [ph] conservative. mean, with they're I very will that? waiting very, clients our quarter. has comments the and on very happy and think very on, marketing waiting So any second competitive Coolbet. that And both position

Karen Flores

differences we what I we're expecting. we But I very the it's notable No. innings it. any otherwise so mean, seen were early think haven't from into rollout far,

both So I sides. a to start on think great we're off

Chad Beynon

revenue of come BXB. on quarter And I think mentioned would from million you've to the $XX revenue million last guidance Thanks. guidance, $XX the then Great.

content given you And -- BXC the the And and part additional to that Silverback we of pick about Ainsworth, if the talk the you can if the the Just BXB you and half with business then to gone? have you. rate between BXB of take should back in Thank see the confirm that kind expect that's that on up that year? of can wanted same. where second the is, is split

Karen Flores

Sure.

seen BXB So the of effects the we yet. not as increasing take have rate of

start full licensing expect not X% comparing second half above that when of increase sports that course to of take it the last Super scale, where really the coming still towards and as we're have the the will effect So take to until quarter, to of we're we believe X%. rate in see you'll this really X%. revenue. patent is effects of as out of the move We're We range year, we content first the rate the RGS, be going year we that as to next to we but more year, notice

Chad Beynon

the the of terms and in split just guide? revenue then BXB And BXC between Okay. on

Karen Flores

no guidance. in to the the There's change split

Chad Beynon

Perfect. Thank you much. it. Appreciate very

Operator

question next the David from line Jefferies. Katz of comes with Our

David Katz

how maybe tribal Thanks taking thoughts that's my more for and you your cetera? and know Afternoon, one one, to questions. preference seems those delve with how just competing you of Hi. share efforts. able may Can each positioned those California each Can chances The little commercially driven. everyone. It see sort those within there there? are of or both of be you just et you that's a we on of too what or farther your more within you

Dermot Smurfit

least Yes, the There thanks right. proposals two appears mean, benched California of for the And lead for third may the question. it out has voter to thankfully, towards at confusion for you're competing now. proposal year. end back been that David, this which significant there are I

initiatives, on on gaming when of XXXX. betting, will if a initiatives. simulated many, track record gambling been tribal converting tribal have And BXB general The the obviously here have many still statement, play we simulated California two since going operator the into very a active a with So either in real to we've clients the for money proposals gaming clients. be years strong game mean, we're there poker will I particularly ballots. in hand as positive California to I we sports think of

in and the fully California. relationships we developed native enjoy those have the on here we long-term that right of American favor So initiative of lean basis in

David Katz

very details, other Understood. I couple a queue. have I'm Thanks do back much. going but into to jump

Operator

is with Our Sigdahl Craig-Hallum. next question from Ryan

Ryan Sigdahl

maybe more elaborate And are efficient additional could versus improvements save details million be and X.X? annually will Curious coming on some qualitatively GameSTACK just what why $XX X.X afternoon. there? if and Good you

Dermot Smurfit

talking leadership group existing Ryan. software which are tech. happy take moving hybrid one Yes, mean, one to GAN really technology in I tech existing I’m you're of who globally, to is that. Coolbet about and competent engineering to system,

the to a efficiencies three software launch that of one in of aspects on efficiency engineer Hopefully, of engineers project. which work critical same we're technical most the helpful. that's work and certain of the And complete interesting exact project, core Coolbet towards instead for One moving software really is software, can that's at the engineering allow, that very early XXXX.

Ryan Sigdahl

the launches Is could So incremental in that early and this be once correct? XXXX million $XX then beyond starting that launches.

Karen Flores

have $XX is through the of over effect million No, of take that quarter. unfold the year we see starting restructuring. we'll periods course to the as this But moved

So most XX% I with that will year, identified remainder would this coming of in say be next it this through year. about of the year,

Ryan Sigdahl

And that of within Karen, XX%, is is that guidance, that or incremental?

Karen Flores

It guidance. is within

Ryan Sigdahl

one XXXX the Great. Then outlook. just on

you I right you prepared So assuming previously changed? I the can about did California. marks? aren't? takes the in talked what you catch and some and on puts through were guess, now of have XXXX But assumptions California You walk you

Karen Flores

of was also launches. around the alluding international Well, of is as Dermot a to, lot our cadence just it

year, we end and assumed where primarily effectively as territories in an the two around really to had our focus. between next of the going that's for So new is now Mexico, per Coolbet guidance, original year it be example,

launch. only we're really expecting So one

compare I really be for XXXX the there. of around the that say we U.S slight sort opportunity there's to focused XXX, are as can aspirational, would highlight on you the while point as But line is, again, it really it bottom profit. we a may it's delay So

that margins achieving there in we have think delay And to to going so guided range don't that XX% we is previously to. towards were that pacing a long-term that XX%

We achieve because will to with for focus that really even profit. being on is track the revenue operational be number the XXX,

Ryan Sigdahl

for me. more One Helpful.

So there. even the balance, for the cash, like and what Seems here, guidance million profitability in next. and $XX good cost efficiencies is

And have core what's one, look given basis. enough true. million for the I $XX business cash a I guess, flow would just positive Thanks. that organic notes on cash specifically, free to rationale you an the comments? then offered, two, you guess that that is You at inflict

Karen Flores

We're fourth cashflow in as the we guided quarter still too. free positive to expecting be originally

We not because of there hyper quite of level in the We're investment. are still growth. yet

get was been expecting again, by while that a quarter. so The we couldn't GameSTACK loan X.X, fourth possibility, the but to in the of have there launch, if as are organically be heavily closing weren't generative for And and the we we -- to we Mexico could investing example, term environment. and uncertainty capitalized are Its the hygiene. it We more be ultimately that at other event looking coming that in the flexible. allows much to we're are in the opportunities sure macro good well make that want corporate away, just us

all So very around. prudent

Ryan Sigdahl

That's guys. end it Great for me. Good my last statement. Thanks. that for on luck,

Karen Flores

Thanks.

Operator

back Smurfit for closing [Operator Instructions] to this We are the floor not receiving any further questions remarks. at time. I turn will Dermot

Dermot Smurfit

quarter XXXX active joining will and full We're positive strong three and to throughout you our a first the us execute we each you look Gan the main transitioned priorities. fourth of the support. year I as Super continued for your We've off international RGS we Thank the third profitable to the forward today to for numerous our EBITDA updating to catalysts again. year. go with upcoming business a now growth Sports, year and in you, Thank continued be progress of start calendar. as everyone all and more generating on sports quarters across Okay. in a

Operator

gentlemen. Thank today's concludes and you, ladies conference. This

time. this lines You at your may disconnect