Mr. Matevz Mazij reports

BRAGG GAMING REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS, CONFIRMS FORMATION OF SPECIAL COMMITTEE

Bragg Gaming Group Inc. has released record financial results for the fourth quarter and full year ended Dec. 31, 2023. The company also provided an update on its strategic growth initiatives and updated its growth targets for 2024 revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

Chief executive officer commentary

Matevz Mazij, chief executive officer for Bragg, commented:

"Through Bragg's strategic efforts to establish the business as a premier content-focused i-gaming B2B provider and our meticulous control over expenses, we achieved growth in revenue, gross profit and adjusted EBITDA in 2023, along with a 210-basis-point improvement in adjusted EBITDA margin to 16.3 per cent. Two thousand twenty-three revenue rose 10.4 per cent to 93.5 million euros ($100.5-million (U.S.)), gross profit increased by 10.8 per cent to 49.9 million euros ($53.7-million (U.S.)) and adjusted EBITDA increased by more than 26 per cent to 15.2 million euros ($16.3-million (U.S.)). These achievements are attributed, in part, to a reconfiguration of our revenue mix, favouring higher-margin products like internally developed proprietary content, and our comprehensive player account management (PAM) platform, all while maintaining stringent cost control measures.

"In the Netherlands, the company maintains its dominant position as the leading PAM provider, serving five customers with our PAM solutions in the region. We are experiencing growth in the Czech market and are exploring new opportunities for expanding with our PAM platform, content aggregation, player engagement tools and managed services in various international jurisdictions.

"Upon closer examination of the Dutch market, it is evident that challenges have arisen due to increased competition and new regulations since July. These challenges are expected to persist, with further adjustments anticipated in 2024. Additionally, in Q4 2023, the company extended its agreement with Entain PLC to supply its PAM platform to BetCity.nl, Entain's Dutch i-gaming operator, until 2025. However, this extension required renegotiating terms. These dynamic variables reduce customer concentration, and at the same time our broader business is thriving and poised for sustained, increasingly profitable growth.

"Additionally, the global distribution of our proprietary and exclusive third party content is rapidly expanding, particularly among an increasing number of Tier 1 operators. We anticipate a further surge in the global adoption of these games in 2024. Last year, we successfully launched a total of 29 new proprietary on-line titles worldwide, including 26 proprietary titles newly introduced to the European on-line casino markets and 15 proprietary titles newly introduced to the North American on-line casino markets. We expect to maintain or exceed this pace of game releases this year.

"By continuously expanding our portfolio of higher-margin proprietary and exclusive third party games to a wider range of new partners at an accelerated pace, we are well positioned for long-term growth in top-line revenue, gross profit and adjusted EBITDA, along with improved operating margins.

"Our strategic actions have positioned Bragg as an essential content source for leading international i-gaming operators, strengthening our groundwork for consistent and profitable development. With confidence, we affirm our readiness with the appropriate strategies, financial strength and infrastructure to maintain our business momentum while executing initiatives that foster cash flow growth and generate added value for our shareholders."

Full-year and fourth quarter 2023 business highlights:

• The company signed several Tier 1 content distribution agreements, including with Betsson, 888/William Hill and PokerStars.
• The company launched content in new regulated markets including in Belgium with Napoleon Sportsbook and Casino, in Italy with Microgame, and in Mexico with Caliente.
• Proprietary and exclusive games rollout continued including with multiple new U.S. operators and in international markets, including in Spain, the United Kingdom and Switzerland.
• Positive proprietary and exclusive content traction in North America from the fourth quarter onward.
• Fourth quarter highlights included launching proprietary content, aggregation and Fuze player engagement with Superbet in Brazil, rolling out new content with BetMGM in New Jersey, and announcing a PAM extension with BetCity.nl, including content and product delivery.

Fourth quarter 2023 financial results and other key metrics highlights:

• Revenue decreased by 1.4 per cent to 23.4 million euros ($25.2 million) compared with 23.7 million euros ($25.5-million (U.S.)) in Q4 2022 reflecting the revised commercial terms agreed with a key strategic partner that took effect during the quarter.
• Wagering revenue generated by customers of 6.1 billion euros ($6.6-billion (U.S.)) increased from 5.1 billion euros ($5.5-billion (U.S.)) in Q4 2022.
• Gross profit decreased by 7.3 per cent to 12 million euros ($12.9-million (U.S.)) from 13 million euros ($14-million (U.S.)) in Q4 2022 with gross profit margins decreased by 330 bps to 51.5 per cent from 54.9 per cent mainly related to the revised commercial terms agreed with a key strategic partner that took effect during the quarter.
• Adjusted EBITDA decreased by 23.7 per cent to 2.8 million euros ($3-million (U.S.)) from 3.7 million euros ($4-million (U.S.)) in Q4 2022 with adjusted EBITDA margins decreasing by 350 bps to 11.9 per cent from 15.4 per cent due to the decline in the gross profit offset by improvement in costs optimization.
• Operational loss for the period was 400,000 euros ($400,000 (U.S.)), a decrease of 600,000 euros ($600,000 (U.S.)) from the same period in the previous year in Q4 2022, primarily due to the lower gross profit while reducing selling, general and administrative expenses.

2023 full-year financial results and other key metrics highlight:

• Revenue increased by 10.4 per cent to 93.5 million euros ($100.5-million (U.S.)) compared with 84.7 million euros ($91.1-million (U.S.)) in 2022.
• Wagering revenue generated by customers of 22.4 billion euros ($24.1 billion) increased from 17.7 billion euros ($19-billion) in 2022.
• Gross profit increased 10.8 per cent to 49.9 million euros ($53.7-million (U.S.)) from 45.1 million euros ($48.5-million (U.S.)) in 2022, representing a gross profit margin of 53.4 per cent.
• Adjusted EBITDA ended 15.2 million euros ($16.3-million (U.S.)), an increase of 26.3 per cent compared with 12.1 million euros ($13-million (U.S.)) in 2022, representing an adjusted EBITDA margin of 16.3 per cent, compared with 14.2 per cent in 2022.
• Cash flow from operations was 11.7 million euros ($12.6-million (U.S.)), an increase of six million euros ($6.5-million (U.S.)) compared with 5.8 million euros ($6.2-million (U.S.)) of cash flow from operations in 2022.
• Cash and cash equivalents as of Dec. 31, 2023, were 8.8 million euros ($9.5-million (U.S.)) and net working capital, excluding deferred consideration and convertible debt, was 5.1 million euros ($5.5-million (U.S.)).

Full-year 2024 revenue and adjusted EBITDA guidance

Bragg provided an update on its expectations for 2024 full-year revenue and adjusted EBITDA growth with revenue expected to rise 9.1 per cent to 16.6 per cent to a range of 102 million to 109 million euros ($109.7-million (U.S.) to $117.2-million (U.S.)) and adjusted EBITDA expected to increase up to 21.7 per cent to a range of 15.2 million to 18.5 million euros ($16.3-million (U.S.) to $19.9-million (U.S.)). The midpoints of the 2024 revenue and adjusted EBITDA guidance ranges represent growth of 12.8 per cent and 10.9 per cent, respectively, over the reported full-year 2023 revenue and adjusted EBITDA.

Review of strategic alternatives

The board of directors confirms that it has formed an ad hoc special committee, chaired by independent board member Don Robertson, to undertake a review of the company's strategic alternatives. The special committee has been appointed to consider and explore strategic alternatives, which may include the sale of the company or of its assets, a merger, financing, further acquisitions, or other strategic alternatives. No timetable to complete the strategic review process has been established, nor have any decisions been made relating to strategic alternatives at this time. There can be no assurances that any transaction will be completed.

The company will not be providing further comment on the status of the strategic review process at this time and intends to provide further updates as circumstances warrant and in accordance with applicable securities laws. While the strategic review process is continuing, the company's management remains committed to executing the company's strategy and business plan with the full support of the board.

Investor conference call

The company will host a conference call today, March 26, 2024, at 8:30 a.m. (Toronto time), to discuss its fourth quarter and full-year 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 (United States and Canada): 1-800-715-9871

Participant toll dial-in number (international): 1-646-307-1963

U.K. toll-free: 44-800-358-0970

Conference ID: 1909159

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

A replay of the call will be available until April 2, 2024, following the conclusion of the live call. To access the replay, dial 647-362-9199 or 800-770-2030 (toll-free) and use the passcode 1909159.

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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