GAN(US:GAN)2023-11-08 16:00Financial Performance - Revenue for the three months ended September 30, 2023, was $29.8 million, a decrease of $2.3 million or 7.2% compared to the same period in 2022[184]. - Net loss for the three months ended September 30, 2023, was $8.2 million, an increase of $1.2 million or 17.6% from the net loss of $6.9 million in the same period in 2022[184]. - Operating loss for the three months ended September 30, 2023, was $7.2 million, which represents a 39.3% increase from the operating loss of $5.1 million in the same period in 2022[184]. - Revenue for the nine months ended September 30, 2023, was $98.7 million, a decrease of $5.9 million or 5.6% compared to $104.6 million in the same period in 2022[195]. - Total revenue for the nine months ended September 30, 2023, was $98.7 million, a decrease of $5.9 million (5.6%) from $104.6 million in the same period of 2022[197]. - Adjusted EBITDA for the nine months ended September 30, 2023, was $(4.5) million, compared to $6.4 million in the same period of 2022[220]. Revenue Breakdown - The United States contributed $7.5 million to total revenue for the three months ended September 30, 2023, a decrease of 27.7% from $10.3 million in the same period in 2022[185]. - Revenue in the United States decreased by $10.3 million (30.6%) to $23.3 million, while revenue in Europe increased by $2.3 million (7.0%) to $35.7 million[196]. - B2B segment revenue for the nine months ended September 30, 2023, was $31.4 million, down $8.6 million (21.4%) from $39.9 million in 2022[212]. - B2C segment revenue increased by $2.7 million (4.1%) to $67.4 million for the same period, driven by higher sports and casino margins[216]. Expenses and Costs - The cost of revenue for the three months ended September 30, 2023, was $9.2 million, relatively consistent with $9.4 million in the comparable period in 2022[189]. - Sales and marketing expenses increased to $7.2 million for the three months ended September 30, 2023, up by $0.4 million or 6.1% from the same period in 2022[190]. - Product and technology expenses rose to $9.2 million for the three months ended September 30, 2023, an increase of $1.6 million or 20.9% compared to the same period in 2022[191]. - Cost of revenue decreased by $2.7 million (8.6%) to $28.9 million for the nine months ended September 30, 2023, primarily due to reduced royalties from SIM revenues[199]. - Sales and marketing expenses increased by $1.4 million (6.9%) to $21.7 million, attributed to increased activities in the B2C operations in Latin America[200]. - General and administrative expenses decreased by $0.2 million (0.7%) to $27.1 million, reflecting cost structure optimization[202]. Customer Metrics - B2C Active Customers decreased to 244,000 for the three months ended September 30, 2023, compared to 261,000 in the same period of 2022, reflecting limited customer acquisition in Latin America[230]. - B2C Marketing Spend Ratio increased to 26% for the three months ended September 30, 2023, compared to 23% in the same period of 2022, driven by limited customer acquisition efforts[232]. - B2C Sports Margin was 6.0% for the three months ended September 30, 2023, down from 6.6% in the same period of 2022, influenced by the outcomes of individual sporting events[234]. Strategic Initiatives - The company expects to achieve profitability through organic growth, expansion into new jurisdictions, and margin expansion from integrating Coolbet's technology[183]. - The company recorded a strategic U.S. patent for linking on-property reward cards to internet gambling accounts, which may lead to future licensing opportunities[183]. - The company expects to continue investing in products and technologies to scale its business, indicating ongoing capital expenditures[237]. - The company amended its Content Licensing Agreement, reducing fixed fees by $15 million and adjusting the contract term[236]. - The Amended Credit Facility increased the principal balance from $30.0 million to $42.0 million, with a minimum liquidity requirement of $10.0 million[241]. Cash Flow - Net cash used in investing activities decreased by 72.8% to $4.8 million for the nine months ended September 30, 2023, compared to $17.5 million in the same period of 2022[246]. - Net cash provided by financing activities decreased by 95.4% to $1.3 million for the nine months ended September 30, 2023, compared to $27.5 million in the same period of 2022[249]. Segment Contributions - Segment contribution for B2B decreased by 18.3% to $25.2 million, while B2C segment contribution increased by 5.9% to $44.6 million[215]. - B2B Gross Operator Revenue for the three months ended September 30, 2023, was $424.1 million, up from $277.8 million in the same period of 2022, representing a growth of 53%[223]. - B2B Take Rate decreased to 2.4% for the three months ended September 30, 2023, down from 4.6% in the same period of 2022, primarily due to a decrease in contractual revenue rates[227].