GAN(US:GAN)2023-03-31 01:48Financial Data and Key Metrics Changes - The company's full-year 2022 revenue increased by 15% to $142 million compared to $124 million in 2021, driven by both B2C and domestic B2B segments [33] - Cash increased by $4.1 million to $45.9 million in the quarter, attributed to strong results from the World Cup in the B2C segment [26] - Adjusted EBITDA loss was $0.4 million for the quarter, an improvement from a loss of $6 million in the prior year, although still negative [46] Business Line Data and Key Metrics Changes - In the B2C segment, active customers grew nearly 50% to 331,000 in the quarter, significantly boosted by the World Cup [45] - The B2B segment met internal revenue guidance but underperformed in profitability due to overconcentration on certain partnerships [13] - The company recorded $137 million in non-cash impairment charges in the quarter, affecting goodwill and intangible assets [28] Market Data and Key Metrics Changes - The company plans to leverage its success in Latin America to enter new regulated markets like Mexico, which has a large and growing total addressable market (TAM) of over $700 million [47] - The Ontario market was exited due to high competition and lack of a clear path to profitability, redirecting resources to higher-return markets [15][16] Company Strategy and Development Direction - The focus for 2023 is on markets with attractive growth profiles and scalability, with a strategy to concentrate resources on fewer, higher-potential opportunities [14] - The company is rolling out GameSTACK 2.0, which is expected to result in $10 million in annual cash savings [19] - A formal strategic review process has been initiated to evaluate options for value creation and improving profitability metrics [20][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that financial performance did not meet expectations due to external factors and suboptimal execution [11] - There is uncertainty regarding 2023 guidance due to the ongoing strategic review process, but management expects to provide updates soon [22][23] - The company believes there is significant unrealized value in its proprietary technology and B2C business, which generated nearly $90 million in annual revenue [21] Other Important Information - The principal debt balance remained at $30 million as of year-end and the quarter [39] - The company is in compliance with financial covenants associated with its term loan but may face potential violations in the future [30][31] Q&A Session Summary Question: Plans for Super RGS and resource allocation - Management confirmed there is no plan to shutter the Super RGS business line but will reallocate resources to an exclusive content distribution deal to save $15 million [4] Question: Changes to the agreement with Incredible Technologies - Management stated there was no exclusive agreement with Incredible Technologies and continues to distribute their games [5] Question: Increase in OpEx despite cost efficiency focus - The increase in product and technology expenses was attributed to impairment-related accounting changes [6][7] Question: Future guidance and EBITDA expectations - Management is unable to provide EBITDA guidance at this time due to the strategic review process [56] Question: Retention rates of new customers acquired during the World Cup - Management indicated that retention rates have outperformed industry expectations, with significant stickiness observed in the Coolbet offering [53]