Dermot Smurfit, CEO of GAN, noted developments in its B2B arm throughout the quarter – including the launch of B2B products in the US and the next version of GAN’s Gamestack technology – as reasons for the uptick in B2B revenue.
“Our third quarter was highlighted by our launch of B2B sports betting technology and managed trading services in the US along with continued progress toward the domestic launch of Gamestack 2.0,” he said.
B2C revenue made up the majority of the total, coming to $19.4m. This was a decline of 7.8%. During the quarter, GAN appointed Endre Nesset as president of B2C.
In contrast, B2B revenue grew slightly, by 13.5% to $12.6m.
Smurfit projected that GAN’s sportsbook platform, GAN Sports, would have a strong launch and added that the Fifa World Cup and entries into other markets also represented good opportunities.
“We are looking forward to what we expect to be a strong launch cadence of GAN Sports, the upcoming Fifa World Cup, as well as our entrance into the Mexico market.”
However, GAN CFO Karen Flores said that these opportunities may be offset by “difficult” macroeconomic environments and headwinds that were present during the third quarter, which also led the company to suspend its full-year guidance.
“While we are excited about the launch of GAN Sports and progress around other initiatives, as expected, a continued difficult foreign exchange environment and European headwinds impacted our third-quarter performance, and we expect those factors to impact our fourth quarter as well,” she said.
“Although we are expecting a significant increase in activity for the World Cup, the unique nature of the event and the wide range of potential outcomes for the quarter have led us to elect to suspend our guidance for the full year.”
After its lower-than-expected results in Q2, GAN lowered its headcount and reduced its full-year revenue guidance to between $142.5m and $152.5m.
The total operating costs for the quarter came to $37.2m – down by 5.4% year-on-year. General and administrative expenses also fell, by 20.9% to $10.1m, but were the highest contributor to operating costs throughout the quarter.
The overall cost of revenue was $9.4m, down by 12.6%. Sales and marketing costs amounted to $6.7m, while product and technology costs came to $4.9m.
After these operating costs, the operating loss stood at $5.1m. This was $1.9m less than in Q3 2021.
Interest expenses were $1.4m. Following this, the pre-tax loss was $6.5m.
After income tax, which came to $356,000, the net loss for the third quarter was $6.9m, down by 20.0%.
Eric J Green joins GAN board
Alongside its third quarter results, GAN announced the appointment of Eric J Green to its board of directors.
“We are constantly evaluating our board structure to ensure that we have the right leadership to support our strategic initiatives,” said Seamus McGill, chairman of the board. “Consistent with that mission, we are thrilled to announce Eric’s appointment to our board of directors, along with his deep knowledge of the capital markets and the US gaming sector.”
Green has over 25 years of investment experience. He has worked for Penn Capital, and still serves as Penn’s chief investment officer of equity, as well as the senior portfolio manager for Penn’s small cap and small- to micro-cap equity strategies.
“It is an honour to be joining GAN’s board and I am incredibly excited to begin working with the team,” said Green. “I look forward to offering my expertise to leverage the best of GAN and accelerate the company’s growth and profitability.”