Mr. Yaniv Sherman reports

BRAGG GAMING GROUP SECOND QUARTER REVENUE RISES 18.9% TO RECORD EUROS24.7 MILLION (USD $27.2 MILLION)

Bragg Gaming Group Inc. has released record financial results for the second quarter ended June 30, 2023. The company also updated its revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) growth targets for full-year 2023.

Chief executive officer commentary

"Bragg's initiatives to focus the business to be a leading content-driven i-gaming B2B provider, combined with disciplined expense management, resulted in record second quarter operating results," said Yaniv Sherman, chief executive officer for Bragg. "Second quarter revenue and gross profit both rose nearly 19 per cent year-over-year to 24.7 million euros ($27.2-million (U.S.)) and 13.8 million euros ($15.2-million (U.S.)), respectively, while adjusted EBITDA increased more than 50 per cent to 4.7 million euros ($5.2-million (U.S.)). These results reflect, in part, our continued shift towards a revenue mix of higher-margin products including in-house created proprietary and exclusive third party content, turnkey player account management (PAM) and managed services partnerships. The mix shift helped drive a 410-basis-point improvement in our adjusted EBITDA margin to 19.2 per cent, an all-time quarterly record.

"During the second quarter we further advanced our efforts to scale the global distribution of our proprietary and exclusive third party content. We continue to grow our distribution in North America as in the first six months of this year we launched our proprietary and exclusive third party content across seven operators in three North American markets. We are similarly focused on expanding our presence in Europe as we launched with 10 operators in five European markets in the same time frame, including now being live with nearly all of the operators in Switzerland and having the leading PAM in the Netherlands. With our successes on this front, we continue to accelerate our new game launches, with 30 new proprietary or third party exclusive games introduced globally in the first half of the year, and up to 40 additional new games expected to be introduced by year-end. The growing distribution of our new games to new partners demonstrates the significant value and engagement of our content as well as our progress in transforming Bragg into a must-have content supplier for leading global i-gaming operators."

Mr. Sherman concluded: "With significant and ongoing progress on our key strategic initiatives Bragg is positioned to deliver further year-over-year revenue and cash flow growth in the second half of 2023 and beyond. Our balance sheet and strong cash flow has us well capitalized to execute on our growth initiatives. We are confident we have the right strategies and infrastructure in place to continue fortifying our position as a leading B2B i-gaming content provider and that our business momentum will create new value for our shareholders."

Second quarter 2023 and recent business highlights:

• New content and RGS (remote game server) technology went live with Rush Street Interactive in Pennsylvania, with FanDuel in Michigan and Connecticut and with WynnBet in New Jersey.
• Entered into new global distribution agreements with Tier 1 operators 888 Holdings and PokerStars (Flutter).
  • These agreements will expand the reach of Bragg's content in leading European markets such as the United Kingdom, Italy, Portugal, Spain, Denmark, Sweden, and in the United States in New Jersey, Michigan and Pennsylvania.
• Launched for the first time in the Eurasian territory of Georgia with Adjarabet.
• Expanded Switzerland and Spain reach with six new customers.
• Since April 1, 2023, the company has made four monthly cash payments to Lind Global Fund II LP in the aggregate amount of $2-million (U.S.), in lieu of conversion into common shares, avoiding further dilution. The total outstanding balance of the convertible security as of Aug. 10, 2023, is $6-million (U.S.).
  • Bragg expects to utilize cash flow from operations to make similar monthly cash payments to further reduce the Lind convertible security.

Second quarter 2023 financial results and other key metrics highlights:

• Revenue increased by 18.9 per cent to 24.7 million euros ($27.2-million (U.S.)) compared with 20.8 million euros ($22.9-million (U.S.)) in Q2 2022.
• Wagering revenue generated by games and content offered by the company increased by 31.2 per cent to 5.5 billion euros ($6.1-billion (U.S.)) compared with 4.2 billion euros ($4.6-billion (U.S.)) in Q2 2022.
• Gross profit increased by 18.9 per cent to 13.8 million euros ($15.2-million (U.S.)) from 11.6 million euros ($12.8-million (U.S.)) in Q2 2022, representing a gross profit margin of 55.9 per cent.
• Net income for the period was 400,000 euros ($400,000 (U.S.)), an improvement from 100,000 euros ($100,000 (U.S.)) in Q2 2022.
• Adjusted EBITDA increased by 51.3 per cent to 4.7 million euros ($5.2-million (U.S.)) compared with 3.1 million euros ($3.4-million (U.S.)) in Q2 2022, representing an adjusted EBITDA margin of 19.2 per cent compared with 15.1 per cent in Q2 2022.
• For the six-month period ended June 30, 2023, total cash flow from operations was 5.2 million euros ($5.7-million (U.S.)) compared with 7.6 million euros ($8.4-million (U.S.)) for the first six months of 2022.
• Cash and cash equivalents as of June 30, 2023, were 10.7 million euros ($11.8-million (U.S.)) and net working capital, excluding deferred consideration, was 8.3 million euros ($9.1-million (U.S.)).

Updates full-year 2023 guidance

Reflecting the business momentum through the first half of the year as well as continuing discussions in regard to optimizing key customer partnerships for the long term, Bragg today updated its 2023 full-year revenue guidance range to 95 million euros to 97 million euros ($104.5-million (U.S.) to $106.7-million (U.S.)) and its full-year adjusted EBITDA to 15.5 million euros to 16.5 million euros ($17.1-million (U.S.) to $18.2-million (U.S.)).

Investor conference call

The company will host a conference call today, Aug. 10, 2023, at 8:30 a.m. Eastern Time, to discuss its second quarter 2023 results. During the call, management will review a presentation that will be made available to download on Bragg's website.

To join the call, please use the below dial-in information:

Participant toll-free dial-in number (U.S./Canada): 888-210-4227

Participant toll dial-in number (international): 646-960-0341

United Kingdom toll-free: 44-800-358-0970

United Kingdom toll dial-in: 44-20-3433-3846

Conference ID: 2522980

A webcast of the call and presentation may also be viewed on Bragg's website.

A replay of the call will be available until Aug. 17, 2023, following the conclusion of the live call. In order to access the replay, dial 647-362-9199 or 800-770-2030 (toll-free) and use the passcode 2522980.

About Bragg Gaming Group Inc.

Bragg Gaming Group is a content-driven i-gaming technology provider, serving on-line and land-based gaming operators with its proprietary and exclusive content, and its cutting-edge technology. Bragg Studios offer high-performing, data-driven and passionately crafted casino gaming titles from in-house brands Wild Streak Gaming, Spin Games, Atomic Slot Lab, Indigo Magic and Oryx Gaming. Its proprietary content portfolio is complemented by a range of exclusive titles from carefully selected studio partners which are powered by Bragg: games built on Bragg remote games server (Bragg RGS) technology, distributed via the Bragg Hub content delivery platform and available exclusively to Bragg's customers. Bragg's modern and flexible omnichannel player account management (Bragg PAM) platform powers multiple leading i-casino and sportsbook brands and is supported by expert in-house managed operational and marketing services. All content delivered via the Bragg Hub, whether exclusive or from Bragg's large, aggregated games portfolio, is managed from a single back office and is supported by powerful data analytics tools, as well as Bragg's Fuze player engagement tool set. Bragg is licensed or otherwise certified, approved and operational in multiple regulated i-casino markets globally, including in New Jersey, Pennsylvania, Michigan, Ontario, the United Kingdom, the Netherlands, Germany, Sweden, Spain, Malta and Colombia.

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