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GiG edges closer to split as revenue hits record €36.2m in Q1

| By Robert Fletcher
Revenue at Gaming Innovation Group (GiG) jumped 27.5% year-on-year to a record €36.2m (£31.1m/$39.0m) in the first quarter, while chairman Petter Nylander revealed the group hopes to complete its business split by Q3.
GiG Q1

Revenue in Q1 was comfortably ahead of the €28.4m reported by GiG last year. The figures are reported with the Platform & Sportsbook division included as continued operations, alongside the GiG Media business.

Last year, GiG announced it was to split the two businesses. While this is yet to take place, GiG spent most of last year preparing for the move. As such, GiG has elected to report Q1 with the business as a whole – and to allow for year-on-year comparisons.

The figures show growth within the GiG Media business but a decline in revenue from the Platform & Sportsbook division. However, such was the success of GiG Media in Q1 that it pushed group revenue to an all-time high.

“Since 2019, our GiG Media business has been on an upward trajectory, marked by robust cash flow and increased earnings diversity,” Nylander said. “The acquisition of AskGamblers in February 2023 has proven fruitful, driving solid revenue growth and First Time Depositors (FTDs). 

“Moreover, the successful integration of KaFe Rocks in December has further diversified our business portfolio, contributing positively to our EBITDA margin.”

GiG aims to complete split by Q3

Nylander also took the opportunity to shed more light on the split, including when it could complete. The much talked-about process has been ongoing since February last year.

GiG Media includes all media offerings such as affiliate lead generation services. Platform & Sportsbook covers technical igaming platforms including Sportnco, acquired in April 2022, and front-end development and other managed services.

Incidentally, last month, GIG revealed it will distribute its Platform business to shareholders as part of the strategic split. Meanwhile, GiG Media will continue to exist under GiG’s operating structure, with GiG continuing to serve as its listed holding company.

According to Nylander, final execution of the split is expected in the third quarter of 2024. This, he adds, is subject to necessary corporate actions, legal and shareholder approvals.

“This strategic move aims to optimise growth opportunities and ensure each business can leverage its distinctive models effectively,” Nylander said.

“As we progress into the future, we remain steadfast in our commitment to creating sustainable long-term growth and value for our shareholders. Our strategic initiatives, including acquisitions, product innovation, and operational enhancements, are geared towards expanding our market reach and maximising revenue opportunities.”

GiG Media revenue up 52.2% in Q1

Breaking down the Q1 performance, it is no secret that GiG Media was the star of the show. Here, revenue increased 52.2% to €28.0m, with GiG hailing an “upward trajectory” within this segment.

Again, the group noted the positive impact of both the AskGamblers and KaFe Rocks deals. It also reported a 13.2% rise in FTDs to 125,100, although this was lower than Q4 of 2023 due to anticipated seasonal patterns.

Other developments in Q1 include a new media partner in Latin America, with GiG saying this is already showing “significant” results after just a few weeks. It also praised the impact of new marketing technologies within the division.

As for geographical performance, revenue at GiG Media grew in all notable markets year-on-year. Americas revenue jumped 82.0%, representing 22.0% of all GiG Media revenue. There was also growth in established legacy markets, including both Nordics and Europe.

Platform & Sportsbook revenue down 17.0%

Turning to Platform & Sportsbook, the situation was quite different, with revenue falling by 17.0% to €8.3m.

This, GiG says, is due to how GiG Enterprise Solution is accounted for under IFRS with the vast majority of the value being recorded in 2023. If excluding the GiG Enterprise Solution for comparison purposes, Platform & Sportsbook revenue was 5.0% higher. 

Eight new brands went live on the platform in the first quarter, compared to two last year. GiG says this represents a “material step up and acceleration” in new partner on-boarding cadence. Two additional brands have also gone live so far in Q2, with two more set to go live shortly in Peru and Mexico. 

A total of 67 brands are now live with GiG Platform, with a further 18 in the integration pipeline. Geographical diversification covers 35 markets, including the current pipeline.

What about the bottom line?

Ahead of the split, GiG reported group revenue with Platform & Sportsbook being reported as discontinued operations. Here, revenue was 52.2% higher at €28.0m for the quarter, with this only including the GiG Media business.

GiG chose to report the rest of its financial results based on this, breaking down the figures with Platform & Sportsbook reported as assets held for distribution. Figures from last year have been adjusted to reflect this.

As such, operating spending was 39.4% higher at €14.5m and depreciation and amortisation costs jumped 77.8% to €3.2m. An additional €446,000 in finance costs were also noted.

This left a pre-tax profit of €9.9m, up 115.2% from last year’s €4.6m. GiG only noted minimal tax, meaning net profit was 125.0% higher at €9.9m.

However, when accounting for Platform & Sportsbook, this is where the situation changes. Loss from assets held for distribution – Platform & Sportsbook – stood at €6.2m, while there was also a €114,000 loss from discontinued operations.

GiG also saw a €140,000 negative impact from foreign exchange, but still posted a net profit of €3.4m, up 9.7%. However, bottom line net profit for Q1 was 41.9% lower at €1.8m. 

As for adjusted EBITDA, this improved by 66.7% to €13.5m.

“I am pleased to present to our first quarterly report for the year 2024, outlining the significant strides and promising developments within our company,” Nylander said.

“I am confident that with our dedicated team, strategic focus and unwavering commitment to excellence, we are well- positioned to capitalise on the exciting opportunities that lie ahead.”

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