GAN Limited, a leading full-service internet gaming software-as-a-service provider to the real-money internet gaming (RMiG), online sports betting, and simulated gaming (SIM) industries, reported its unaudited financial results for the third quarter ended September 30, 2021 with revenue coming in at $32.3m versus $34.6m, a seven per cent decrease driven by sports seasonality and lower sports betting margins than the prior quarter, despite an increase in the number of active customers.
B2B segment revenue was $11.2m versus $10.6m, driven primarily by an increase in hardware sales during the third quarter. B2C segment revenue was $21.1m, a $2.9m decrease from $24m, driven by lower sports betting margins as event results favored customers during the third quarter. The decrease was partially offset by organic growth in casino and poker revenues within the segment.
Net loss was $7.9m versus net loss of $2.7m. The quarter over quarter increase was primarily related to the impact of lower B2C sports book margin, as well as a total of $1.5m adverse impact due to an additional tax provision expense, foreign currency effects and a purchase accounting adjustment related to the Coolbet acquisition.
Dermot Smurfit, CEO of GAN stated: “Our third quarter financial results were in line with our expectations as our B2B segment revenues rose five per cent compared to the prior quarter, while our B2C revenues experienced seasonality following a record second quarter. We added the iconic Treasure Island Hotel & Casino to our growing list of SIM clients during the quarter, and continued to demonstrate the value of our ‘multi-state, one app’ capability as we launched Churchill Downs’ online sports betting operation in Arizona. We also built upon our existing relationship with FanDuel, helping to deliver their iGaming platform in the state of Connecticut subsequent to quarter-end. Lastly, we continued to allocate our capital spending toward its most productive uses – ensuring it is deployed behind our people and technology – as we opened a new tech hub in Miami to leverage a rich and growing technology-oriented labor pool.”
“The last few weeks have been eventful as our management team debuted GAN Sports (our sports betting kiosk), our Super RGS platform and other new products at the Global Gaming Expo (G2E) in Las Vegas. Our growing portfolio of products and content that roll up into our B2B product suite will further expand our position as a premier, holistic provider of technology solutions, popular games and original, exclusive content. We also provided a deep dive into our B2B and B2C strategies, the complexity and value of our technology, and showcased the depth and experience of our broader leadership team at our inaugural Investor Event in October. We believe these initiatives will ultimately yield over $500m of revenue by 2026 and a long-term Adjusted EBITDA margin of 30 to 35 per cent at scale. We continue to make exciting progress in each of our business segments and initiatives and are well-positioned going forward.”