GAN (GAN) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 increased 5.3% year-over-year to $35.6 million, driven by B2B expansion and cost rationalization, offset by B2C declines in Latin America.

• Net loss narrowed to $1.7 million in Q2 2024 from $18.4 million in Q2 2023, reflecting higher revenues and lower operating expenses.

• Adjusted EBITDA for Q2 2024 was $3.7 million, compared to negative $2.0 million in Q2 2023, supported by increased B2B activity and cost reductions.

• The company continues to execute cost-saving initiatives, reducing headcount and operating expenses.

• Merger with SEGA SAMMY CREATION remains on track for late 2024 or early 2025, with regulatory approvals progressing.

Financial highlights

• Q2 2024 revenue: $35.6 million (up 5.3% year-over-year); B2B revenue: $13.0 million (up 31.3%); B2C revenue: $22.6 million (down 5.4%).

• Q2 2024 net loss: $1.7 million; Adjusted EBITDA: $3.7 million; cash at June 30, 2024: $36.9 million.

• Operating expenses decreased to $25.1 million from $32.8 million, mainly due to lower compensation and amortization.

• B2B Gross Operator Revenue for Q2 2024: $609.3 million, up 40% year-over-year.

• Effective tax rate for Q2 2024 was (81.3)%, reflecting a mix of earnings in foreign jurisdictions and unrecognized loss carryforwards.

Outlook and guidance

• Management expects profitability through organic growth, expansion into new jurisdictions, margin expansion from Coolbet integration, and continued cost reductions.

• Focus remains on optimizing cost structure and rolling out product enhancements to drive profitability.

• The company anticipates the closing of the SEGA SAMMY CREATION merger in late 2024 or early 2025, pending regulatory approvals.