GAN(US:GAN)2022-05-15 16:00Revenue Performance - Revenue for the three months ended March 31, 2022, was $37.5 million, an increase of $10.4 million or 38.3% compared to the same period in 2021[146]. - The B2C segment contributed $10.1 million to the revenue increase, driven by higher sports and casino margins and growth in active customers in Latin America[149]. - Revenue from Latin America increased significantly, contributing $8.6 million, while revenue from Europe increased by $2.0 million, primarily due to Coolbet operations[150]. - B2B revenue for the three months ended March 31, 2022, was $13.07 million, a 2.1% increase from $12.81 million in the same period of 2021[161]. - B2C revenue surged to $24.42 million, representing a 70.7% increase compared to $14.31 million in the prior year[166]. Cost and Expenses - Cost of revenue was $11.7 million for the three months ended March 31, 2022, an increase of $3.0 million or 34.2% from the prior year, primarily due to higher processing fees and increased revenue share[151]. - Sales and marketing expenses rose to $6.1 million, an increase of $2.0 million or 48.7%, mainly due to increased activities to attract additional end-users in the B2C segment[152]. - Product and technology expenses increased to $9.0 million, up $3.7 million or 70.8%, reflecting higher employee costs as the company ramped up its team[154]. Profitability and Loss - The net loss for the three months ended March 31, 2022, was $4.5 million, a reduction of $1.1 million or 19.8% compared to the net loss of $5.6 million in the same period of 2021[146]. - The company expects to achieve profitability through organic growth, expansion into new jurisdictions, and margin expansion from integrating Coolbet's technology[142]. - Adjusted EBITDA for the three months ended March 31, 2022, was $2.97 million, compared to $537,000 in the same period of 2021[170]. Customer Engagement - B2C active customers increased to 230,000, up from 112,000, indicating significant growth in user engagement[173]. - B2C segment gross profit increased by 99.5%, driven by higher gaming revenues and improved sports and casino margins[167]. Financing and Cash Flow - The company has cash on hand of $33.6 million as of March 31, 2022, which is expected to meet working capital and capital expenditure requirements for at least the next twelve months[190]. - A subsidiary entered into a $30.0 million credit facility with a floating interest rate, maturing on October 26, 2026[192]. - Net cash used in operating activities decreased by $2.5 million to $(2,024) thousand, a 55.4% improvement compared to $(4,536) thousand in the previous year[194]. - Net cash used in investing activities decreased significantly by $90.6 million to $(3,988) thousand, primarily due to a $92.4 million cash payment for the acquisition of Coolbet[197]. - Payments totaling $8.5 million were made to third-party gambling content providers for rights to use and distribute online gaming content in North America, impacting cash flows from operations[196]. - The net decrease in cash was $(5,894) thousand, a 94.1% improvement from $(100,469) thousand in the prior year[194]. - The effect of foreign exchange rates on cash resulted in a positive change of $118 thousand, compared to a negative impact of $(1,018) thousand in the previous year[194]. - The company may face challenges in securing future financing, which could adversely affect investments in new products and technologies[193]. Strategic Initiatives - The acquisition of Coolbet was completed on January 1, 2021, for a total purchase price of $218.1 million, which included $111.1 million in cash and the issuance of shares valued at $106.7 million[144]. - The company is strategically reducing its global workforce to streamline operations and enhance competitiveness in the B2B segment[143]. - The company expects to launch an integrated B2B sportsbook technology solution in North America in Q4 2022[184]. - An increase of $1.8 million in spending for capitalized software development costs was noted, related to product enhancements and new features for both B2B and B2C platforms[197].