Mr. Matevz Mazij reports

BRAGG GAMING GROUP THIRD QUARTER REVENUE RISES 8.0% YEAR OVER YEAR TO EUROS22.6 MILLION (USD $24.0 MILLION)

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

Chief executive officer commentary

"Bragg's initiatives to position the business as a leading content-driven i-gaming B2B provider as well as our disciplined expense management combined to drive growth in third quarter revenue, gross profit and adjusted EBITDA, as well as a quarterly adjusted EBITDA margin of 16.9 per cent," said Matevz Mazij, chief executive officer for Bragg. "Third quarter year-over-year revenue rose 8 per cent to 22.6 million euros ($24.0-million (U.S.)), gross profit increased 13.5 per cent to 11.9 million euros ($12.6-million (U.S.)) and adjusted EBITDA increased more than 70 per cent to 3.8 million euros ($4.0-million (U.S.)). These results reflect, in part, a revenue mix shift to higher-margin products, including in-house created proprietary content, exclusive third party content, and turnkey player account management (PAM) and managed services partnerships, alongside our ongoing cost control actions.

"The global availability of our proprietary and exclusive third party content is accelerating, particularly with a growing number of Tier 1 operators, and we expect our global market penetration for these games to accelerate further in the fourth quarter and throughout 2024. During the quarter, we launched 12 new proprietary and exclusive third party games in the largest four regulated on-line casino markets in the United States, and we expect to continue to release games at this cadence or higher over the next 12 months. We are also expanding our presence in Europe, where we have introduced 15 proprietary and exclusive third party games during the third quarter, including with several new customers in the region. We continue to have the leading PAM in the Netherlands, which is live with operators that we estimate account for approximately 30 per cent of the gross gaming revenue generated in the market. As we continue to introduce more higher-margin proprietary and exclusive third party games to more new partners at a faster pace, we expect to generate further top-line, gross profit and adjusted EBITDA growth, as well as higher operating margins."

Mr. Mazij concluded: "Our strategic initiatives have helped position Bragg as a must-have content supplier for leading global i-gaming operators, further building our foundation from which we can deliver consistent profitable growth. We are confident we have the right strategies, balance sheet and infrastructure in place to further our business momentum as we continue to successfully execute on our strategies that are generating cash flow growth and creating new value for our shareholders."

Third quarter 2023 and recent business highlights:

• Effective Aug. 28, 2023, the company introduced Mr. Mazij as its new chief executive officer;
• New content and RGS technology went live in Michigan and Connecticut with FanDuel;
• Secured global distribution agreement with Tier 1 operator 888 Holdings, launching Bragg's content across a number of popular on-line casino brands, including William Hill, 888, Mr. Green and SI Sportsbook;
• Secured content distribution agreement with Tier 1 operator PokerStars (Flutter) in Europe for the following jurisdictions: the United Kingdom, Italy, Portugal, Spain, Denmark and Sweden, and in the United States for New Jersey, Michigan and Pennsylvania;
• New content went live in the U.K. with Unibet, a leading brand from Kindred Group;
• Launched content with Tier 1 operator bet365 in Ontario;
• In October, the company expanded its content distribution in Italy through a new agreement with Lottomatica Group SpA, the leading on-line operator in Europe's second-largest on-line casino market;
• In November, the company extended its agreement with Entain PLC to supply Entain's Dutch i-gaming operator, BetCity.nl, with its PAM platform until 2025;
• Since July 1, 2023, the company has made five monthly cash payments to Lind Global Fund II LLP in the aggregate amount of $2.5-million (U.S.), in lieu of conversion into common shares, avoiding further dilution:
  • The total outstanding balance of the convertible debt as of Nov. 9, 2023, is $4.5-million (U.S.);
  • Bragg expects to utilize cash flow from operations to make similar monthly cash payments to further reduce the Lind debt.

Third quarter 2023 financial results and other key metrics highlights:

• Revenue increased by 8.0 per cent to 22.6 million euros ($24.0-million (U.S.)), compared with 20.9 million euros ($22.2-million (U.S.)) in Q3 2022.
• Wagering revenue generated by customers increased 24.6 per cent to 5.7 billion euros ($6.0-billion (U.S.)), compared with 4.6 billion euros ($4.9-billion (U.S.)) in Q3 2022.
• Gross profit increased 13.5 per cent to 11.9 million euros ($12.6-million (U.S.)) from 10.4 million euros ($11.0-million (U.S.)) in Q3 2022, representing a gross profit margin of 52.5 per cent.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was 3.8 million euros ($4.0-million (U.S.)), an increase of 70.5 per cent compared with 2.2 million euros ($2.3-million (U.S.)) in Q3 2022; adjusted EBITDA margin was 16.9 per cent compared with 10.7 per cent in Q3 2022.
• For the nine-month period ended Sept. 30, 2023, total cash flow from operations was 6.2 million euros ($6.6-million (U.S.)), compared with 7.7 million euros ($8.2-million (U.S.)) for the first nine months of 2022; the 1.5-million-euro ($1.6-million (U.S.)) decrease reflects working capital movement in the first nine months of 2023.
• Cash and cash equivalents as of Sept. 30, 2023, were 7.9 million euros ($8.4-million (U.S.)) and net working capital, excluding deferred consideration and convertible debt, was 6.3 million euros ($6.7-million (U.S.)).

Reiterates full-year 2023 guidance

Reflecting the company's business momentum through the first nine months of the year as well as continuing initiatives to optimize key customer partnerships for the long term, Bragg reiterates its 2023 full-year revenue guidance range of 95 million euros to 97 million euros ($100.7-million (U.S.) to $102.8-million (U.S.)) and its full-year adjusted EBITDA range of 15.5 million euros to 16.5 million euros ($16.4-million (U.S.) to $17.5-million (U.S.)).

Investor conference call

The company will host a conference call today, Nov. 9, 2023, at 8:30 a.m. Eastern Time, to discuss its third quarter 2023 results. During the call, management will review a presentation that will be made available to download from the company's website.

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

Participant toll-free dial-in number (United States/Canada):  888-210-4227

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

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

U.K.:  toll dial-in at 44-20-3433-3846

Conference ID No.:  2522980

A webcast of the call and presentation may also be viewed at the company's website.

A replay of the call will be available until Nov. 16, 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 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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