GAN reports Q2 revenue increase as Sega Sammy deal nears completion
B2B revenue increases 31% year on year while an underwhelming Latam performance leads to a drop in B2C active customers
GAN has recorded Q2 revenue of $35.6m (£27.8m), marking a 5% increase year on year (YoY) for the B2B and B2C firm.
The company’s B2B revenue increased 31.3% YoY to $13m, a rise which it attributed to an enhanced product offering in the US state of Nevada and “revenue related to the exit of a B2B partner in Michigan”.
Platform and content licence fees contributed $8.7m, while development services and other B2B revenue streams added $4.3m.
B2C revenue from GAN’s gaming operations came to $22.6m, down 5% from the corresponding period the previous year.
This was driven by lower player activity in the Latam market, in addition to “lower margins resulting from unfavourable event outcomes”.
GAN’s US revenue increased 43.8% Y8Y to $10.5m, while Europe overtook Latam to be the firm’s largest revenue-driving region – generating $14.1m, up from $12.1m in 2023.
Latam revenue dropped 33.3% to $8.2m, while revenue generated from the rest of the world rose to $2.8m, up from $2m in Q2 2023.
Operating expenses for Q2 decreased to $25.1m against $32.8m in Q2 2023 as bosses pointed to a “reduction of compensation costs and reduced headcount realised as part of ongoing cost saving initiatives”.
Adjusted EBITDA amounted to $3.7m, up from the $2m loss suffered in Q2 2023 as higher revenue and lower costs flipped earnings from red to black.
Overall, net losses dropped significantly in Q2, falling 90.8% to $1.7m, partly due to increased revenues, decreased expenses and Q2 2023 including a loss on debt extinguishment of $8.8m.
For the first half of the year, GAN’s revenue came to $66.2m, down from $68.9m in H1 2023.
H1 adjusted ABITDA landed at $3.2m, while net losses fell to $5.9m from $16.9m in 2023.
During Q2, GAN’s pending acquisition by Japanese entertainment company Sega Sammy received shareholder approval.
The $107.6m deal, first announced in November 2023, is expected to close in either late 2024 or early 2025.
GAN CEO Seamus McGill said: “I’m very pleased with the continued operational progress the team is delivering.
“We achieved top-line revenue growth in the second quarter while reducing our operating expenses. We continue to operate the business more efficiently with a focus on improved profitability.”
McGill added that the Sega Sammy merger remained the company’s top priority.
explaining: “Looking ahead, our focus remains unchanged. We will continue to optimise our overall cost structure and roll out product enhancements.
“We continue to work through the gaming regulatory requirements for our planned merger with Sega Sammy and anticipate a successful closing in late 2024 or early 2025.”