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Record Q4 helps GiG return to net profit in 2022

| By Robert Fletcher
Gaming Innovation Group (GiG) returned to net profit in its 2022 financial year following a record fourth quarter in which the provider achieved all-time high revenue.
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Revenue increased quarter-on-quarter throughout the year, culminating in a new quarterly record in Q4, with growth across all core areas of the business.

Chief executive Richard Brown said as GiG now has a footprint in more than 30 regulated markets around the world, with “good” demand for its products, he is confident that the business can go on to achieve further growth in 2023 and beyond.

“We enter 2023 with further belief that our strategy and long-term objectives are providing us exciting opportunities to continue to develop the business, provide earnings growth and ultimately increase shareholder value,” Brown said.

“We continue to see good demand for our products and a global regulated footprint in 30+ markets continues to position us exceptionally well to be a supplier of choice for partners.”

Record results

Looking at GiG’s record fourth quarter, revenue for the three months to 31 December stood at €26.0m (£23.1m/$27.9m), an all-time high and 44.4% higher than in the corresponding period in the previous financial year.

Breaking this down, the GiG Media section of the business accounted for €17.8m of total revenue, another record for the provider. This included €11.4m in publishing revenue, and €6.4m in paid revenue, both of which were helped by an increase in player intake.

Of all revenue in the GiG Media segment, 60% of revenue came from revenue share, 24% listing fees and other sources, and 16% cost per acquisition. 

Platform and sportsbook revenue also increased 54.7% year-on-year to €8.2m. GiG said it now has 41 clients for this area of the business and is active across 62 brands, with 37% of all clients taking its sportsbook product.

GiG also noted that the transition from white labels to a pure SaaS offering is complete and the negative impact on revenue from regulatory changes as seen in Germany and the Netherlands in prior years should be limited going forward. In addition, the provider said this area is to grow moving forward.

Turning to spending in Q4, cost of sales were €397,000 and operating expenses were €14.8m. Depreciation and amortisation costs were €5.2m, amortisation of acquired affiliate assets expenses hit €1.1m and net finance costs amounted to €1.5m.

Pre-tax profit stood at €2.5m, compared to a €522,000 loss in the previous year. GiG paid €1.0m in tax and also accounted for a €1.3m loss from discontinuing operations. This left a net profit of €160,000, in contrast to a €1.7m loss in 2021.

In addition, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 71.4% higher at €10.8m.

Full year results

Looking at the full year, GiG did not publish a full breakdown of its performance, but did set out all key figures, including that revenue increased 36.4% to €90.4m.

Cost of sales were €858,000 and operating expenses €55.0m. Depreciation and amortisation reached €16.4m, amortisation of acquired affiliate assets costs was €4.3m and net finance costs were €4.0m.

Pre-tax profit rocketed 500.0% year-on-year to €7.8m, while GiG paid €2.1m in tax and also noted a negative €2.6m impact from discontinuing operations.

This resulted in a net profit of €3.1m, compared to a €62,000 loss in 2021. In addition, adjusted EBITDA was 47.1% higher at €32.5m.

“Our employees and I are eager to push forward with conviction and ambition towards growing the business,” Brown added.

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