The business was able to deliver its 13th successive quarter of growth despite Q1 normally being a sequentially weaker quarter, with the increase also coming on the back of a record Q4 that included a Fifa World Cup.
GiG was able to grow its media business in the quarter after completing the acquisition of casino affiliate sites Askgamblers.com from Catena Media in January. The deal included a number of other assets such as Johnslots.com and Newcasinos.com.
Reflecting on the quarter, GiG chief executive Richard Brown said that these “successful and impressive” steps will help the group pursue and achieve further growth in the longer term.
“The business continued positively across the delivery roadmap and it was commercially a successful quarter with the signing of additional seven new agreements,” Brown said. “We have an excited and packed roadmap for the coming year that will help underlie the future growth potential and margin expansion of the segment.
“I am also pleased to report that the focus of the segment has resulted in 91% of its operators revenues coming from locally regulated or soon to be regulated markets.”
GiG Q1 results
Revenue in the three months to 31 March reached €28.4m (£25.0m/$31.5m), up 48.7% from €19.1m in the corresponding period in the previous year.
The GiG Media arm accounted for €18.4m of all revenue in Q1, a 30.5% increase on 2022, helped by the addition of AskGamblers part-way through the quarter. Some 65% of this was drawn from revenue share agreements, while 31% came from paid media, 24% listing fees and other services, and 11% cost per acquisition.
The group also noted that GiG Media referred 110,800 new first-time depositors (FTDs) to operators in Q1, up 65.4% on the previous year.
Turning to platform and sportsbook, revenue doubled from €5.0m in 2022 to €10.0m this year. This was despite a negative, year-on-year impact of €400,000 due to the expiration of premium fees from Betsson from 15 April 2022.
Of all revenue in this area, 91% came from locally regulated or soon-to-be regulated markets where there is a clear timeline or progress towards local regulation. Some 64% of operator revenue came from Europe, 13% North America, 14% South America and 9% Rest of World.
Turning to spending, cost of sales hiked 944.8% to €303,000 while marketing costs climbed 50.0% to €5.7m and other operating costs 24.4% to €10.7m. Total operating expenses were 33.3% higher at €16.4m.
Depreciation and amortisation costs increased by 58.3% to €5.7m, while after also including financial and other expenses, this left a pre-tax profit of €4.2m, up 147.1% year-on-year.
GiG paid €200,000 in tax, meaning net profit from continuing operations hit €4.0m, a rise of 150.0%, while after accounting for a €400,000 loss from discontinued operations, total net profit was €3.7m, up 236.4%. In addition, adjusted EBITDA increased 72.3% to €11.2m.
“The first quarter of 2023 had a multitude of successful and impressive steps forward for Gaming Innovation Group,” Brown said. “Many of which are contributing to create excitement within the business of further potential of the companies within the group.”
Strategic review
Brown also referenced the strategic review that launched in February, with the intention to distribute one of its subsidiaries, Innovation Labs, to shareholders. The distribution would effectively split GiG into two independent publicly listed companies.
“The quarter also saw the business begin the strategic review and spin off project successfully with strong progress in the early stages of the planning of what is a complex exercise,” Brown said. “We now move into a more executional period over the remainder of the year.
“GiG had a good start to the year with progress and consistent steps forward on our long-term value creation plan, and we early anticipate continuing to execute with a focus and discipline on our growth and margin expansion targets.”
Original article: https://igamingbusiness.com/finance/quarterly-results/revenue-reaches-record-e28-4m-at-gig-in-q1/
