GAN(US:GAN)2023-05-11 01:33Financial Data and Key Metrics Changes - The company generated revenue of $35.1 million in Q1 2023, a decrease of 6% from the prior year quarter, primarily due to a decrease in contractual revenue rates in the B2B division [14][16] - Adjusted EBITDA was modestly positive, with cost-saving measures offsetting the revenue decrease [20] - The cash balance at the end of the quarter was $40.8 million, down from $45.9 million at year-end, primarily due to changes in working capital [34] Business Line Data and Key Metrics Changes - B2B revenues were $8.6 million, down from $10.7 million in the prior year period, attributed to a decrease in the take rate [38] - B2C revenues remained consistent year-over-year, with underlying growth on a local currency basis despite adverse foreign exchange [16] - The B2B division processed $423 million of gross operator revenue, an increase of over 40% from the prior year period [18] Market Data and Key Metrics Changes - The B2C division achieved nearly $90 million in revenues last year, with record revenue in its largest market achieved last month [7] - The company exited the B2C division from the Ontario market to focus on faster return markets in Latin America [11][28] - New customer growth in the B2C division was 12% post-World Cup, with a marketing spend ratio well below U.S. peers at just 21% [18][19] Company Strategy and Development Direction - The company is focused on B2B GAN Sports and LATAM B2C, with plans to roll out GAN Sports across major U.S. gaming markets [22][46] - A strategic review process has been initiated, with three key steps already taken to enhance shareholder value, including debt restructuring and cost reductions [12][41] - The company aims to leverage its proprietary technology offerings and expand its presence in profitable markets [43][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of GAN Sports and the B2C division in Latin America, particularly following successful partnerships and market entries [22][26] - The company is unable to provide forward guidance due to the ongoing strategic review process, but anticipates significant growth in adoption rates and demand [44][56] - Management remains optimistic about the financial flexibility gained from recent amendments to credit facilities and agreements [32][41] Other Important Information - The company reduced the cost of licensing Ainsworth iGaming content by $15 million in exchange for equity, which will increase the share count from 42.6 million to approximately 43.8 million [36] - The new fixed interest rate on the credit facility is 8%, down from an effective rate of 15.5% in the prior year quarter, resulting in estimated annual savings of $4 million in cash interest [35] Q&A Session Summary Question: What happened from spend till now? - Management indicated ongoing commercial discussions with B2B clients, with some agreements finalized at the end of the quarter [50][52] Question: What was the new rate for the largest B2B customer? - Management declined to disclose specific contract details due to the strategic review process [55] Question: How long does it take to get a customer up and running for GAN Sports? - Management noted that the rollout for Wynn Resorts is expected to be significant, with multiple markets going live this summer [65][66] Question: What is the current status of the B2C division in Mexico? - Management expressed optimism about growth in Latin America, particularly in Mexico, despite a slower start [62][63] Question: What is the fully diluted share count? - Management indicated that the fully diluted number is around 47 million, accounting for options and other equity instruments [70]