GAN Plc’s B2C segment proved the standout performer during Q2 this year as its B2B division suffered some setbacks, causing an overall decline in group-wide revenue.
The firm explained to its NYSE investors that total revenue dropped 3% during the quarter to $34m (Q2 2022: $35m), and adjusted EBITDA also fell substantially from £1.3m in 2022 to a loss of £2m in 2023’s second quarter.
GAN attributed these drop offs primarily to hurdles encountered by its B2B division, but by contrast the B2C segment saw revenue increase 13% from £21m to $24m, driven chiefly by a strong performance in betting and casein in Europe and Latin America.
The company’s B2C operations primarily consist of the Coolbet brand, which is active in the nordic markets of Europe and the four prominent Latin American sectors of Ecuador, Peru, Chile and Mexico.
In an interview with SBC Media earlier this year, Coolbet President Endre Nesset explained how the brand’s background in Northern Europe provided a solid bedrock for future expansion into Latin American markets.
This B2C success was the highlight of GAN’s Q2, although another notable achievement saw the group’s net loss cut down 52% from $38m to $28m, coupled with a reduction in marketing expenses by 47% from $62m to $33m.
Dermot Smurfit, CEO of GAN, said: :“Our second quarter saw solid execution and progression of our business plan. We continued to see strength in international markets for B2C, expanded our roll-out of GAN Sports, and made significant progress on the new GameSTACK 2.0 version of our technology platform.
“With GAN Sports now live in nine US states and the encouraging momentum we are seeing in our international markets, we would expect our top-line performance to improve over the coming quarters and into 2024.”
GAN’s B2C division did not go through Q2 entirely without difficulties however, as the number of active customers for the segment did fall marginally from 260,000 to 257,000, largely as a result of Coolbet’s withdrawal from Ontario.
However, as mentioned above, the B2B division – which encompasses a range of services such as a real money casino platform, responsible gambling solutions and a sportsbook – encountered the biggest difficulties, largely contributing to the drop off in group-wide revenue.
The segment recorded a decline of 30% to $10m ($14m). This was attributed by the group to a drop in contractual revenue rates regarding an exclusivity period with an unnamed B2B client.
Despite this, post-quarter developments have seen some positive changes. As referenced by Smurfit, GAN’s B2B sports betting tech has now gone live in nine states, with the addition of six – Indiana, Tennessee, Arizona, Louisiana, Virginia, and Colorado – occurring after Q2 via a rollout with WynnBET.
In the midst of this, however, Smurfit did provide investors with a key update on the future of the business, stating the possibility of a change in ownership.
He explained: “As an update on our strategic initiatives, we have received indications of interest from prospective bidders interested in acquiring all or part of our business. A special committee of our Board of Directors, comprised of Non-Executive Directors, is evaluating those alternatives.
“The indications of interest are non-binding; no definitive agreements for a strategic transaction have been reached at this time. There is no assurance that a transaction will take place, and no timetable for completion of any transaction.”