GAN blames “unfavourable” sports margin for 13% YoY fall in Q1 revenue

Revenue lands at $30.7m as B2C segment slips compared to Q1 2023 and bosses confirm Sega Sammy merger will complete by early 2025
The post GAN blames “unfavourable” sports margin for 13% YoY fall in Q1 revenue first appeared on EGR Intel.  

GAN has reported a 13% year-on-year (YoY) fall in revenue for Q1 2024, with CEO Seamus McGill explaining the business was impacted by lower sports margin.

The figure dropped from $35.1m to $30.7m, while B2C segment revenue also decreased from $23.9m to $18.3m, driven by reduced player activity and the aforementioned lower sports margin.

B2C active customers dropped due to limited customer acquisition in Latam and a lower volume of sporting events, according to the firm.

However, B2B revenue did rise from $11.3m to $12.3m, with GAN pointing to the expansion of its offerings in Nevada as a core driver.

B2B gross operator revenue rose to $632m, from $422.8m in the same period last year thanks to growth in several US states, including Michigan and New Jersey as well as the Canadian province of Ontario.

GAN also reported an adjusted EBITDA loss of $600,000 for Q1 2024 compared to earnings of $39,000 in Q1 2023. Bosses said the “modest decrease” was owing to lower B2C revenue.

A net loss of $1.5m was also recorded during the reporting period compared to a $4.2m net profit in Q1 2023.

GAN noted that the previous period was “bolstered” by a $9.3m “one-time gain associated with the amended content licensing agreement”.

In addition, operating expenses declined from $31m to $24.6m as a result of a reduction in compensation costs and cuts to headcount.

Despite the downturns in Q1, McGill noted how a summer of major football tournaments – the European Championships and Copa America both kick off in June – has the firm “excited” for the future. 

“Our first quarter saw strong B2B revenue growth of nearly 10% as well as successful ongoing cost initiatives to reduce our overall operating expenses by 20%,” he said.

“Our B2C revenues were impacted by a lower sports margin, though we are excited about the pending rollout of new products, such as pre-built parlay bets and the upcoming major events like the European Championship as well as Copa America – one of the largest football tournaments in Latin America where Coolbet is particularly strong.”

Addressing the upcoming Sega Sammy transaction, GAN had previously said it will be completed late this year or early 2025.

McGill confirmed that the company is working towards optimising the business ahead of the merger. 

He said: “GAN shareholders overwhelmingly approved the merger in February, and more recently, we have submitted our application to the Committee on Foreign Investment in the US as well as all applications with relevant gaming regulatory authorities.

“We continue to expect the transaction to close in late 2024 or early 2025.”

The post GAN blames “unfavourable” sports margin for 13% YoY fall in Q1 revenue first appeared on EGR Intel.

 

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