GAN announces Q1 2019 trading update

(PRESS RELEASE) -- GAN plc, an award-winning developer and supplier of enterprise-level B2B internet gambling software and services in the United States and Europe, today provides an update on trading for the first quarter period ending 31 March 2019.

Financial Highlights for the First Quarter 2019 – Record Revenues and Return to Positive EBITDA
GAN generated record revenues of £4.6 million during the first quarter ended 31 March 2019, up 122% on a year-over-year basis when compared to the first quarter of 2018 and approximately £0.2M (+5%) ahead of expectations provided as part of the company’s financial results call held on 29 March 2019. This is primarily driven by higher than expected growth of New Jersey’s sports betting in addition to higher than expected casino cross-selling from internet sports bettors into internet casino gaming during the Q1 period.

The company also generated positive EBITDA of £0.6 million in the unaudited Q1 2019 period, returning the company to positive EBITDA following the strategic investment cycle to expand the company’s engineering resources.

As of 30 April 2019, GAN enjoys a debt-free balance sheet, including £8.6 million in cash and cash equivalents. Management has reiterated there will be no need for additional capital raises in the foreseeable future.

2019 outlook
The outlook for 2019 continues to remain highly positive for GAN as it continues to see rapid growth in real money gaming in the US markets as well abroad. In addition, the company continues to see higher than expected growth in regulated sports betting markets which it believes will lead GAN to a record year. The company maintains its full year guidance of mid to high double-digit revenue growth with positive EBITDA.

The outlook for the first half year period and full calendar year 2019 is contingent on (a) the market size, clients’ market share and growth rate of Internet gambling in New Jersey; (b) the timing with which Pennsylvania’s regulator the Pennsylvania Gaming Control Board (“PGCB”) permits the launch of internet real-money gambling for residents of the State of Pennsylvania; and (c) the speed with which efficient marketing of the Overseas Internet Casino is conducted in European regulated markets by GAN.

Management commentary
Dermot Smurfit, CEO of GAN, commented, “We are very pleased with our performance through the first three months of 2019 with a record top-line figure and return to a positive EBITDA. We knew that the initiatives set in place throughout 2018 positioned the company for a strong first quarter and fiscal year 2019. We remain focused on landing new clients, and expanding upon existing contracts with clients, in addition to preparing ourselves for a rapidly expanding market due to an acceleration in sports betting-led online gambling regulation in the United States.”

Sports betting update
The company saw rapid growth in internet sports betting in New Jersey in the first three months of 2019, driven by national events such as the Super Bowl (American football) and NCAA’s college basketball tournament.

GAN continues to highlight the growth of internet gambling in New Jersey in a monthly press release: Total Internet Gaming Win was $39.1 million in March up 52.7% year-on-year and Internet Sports Wagering Gross revenues in the same month was $24.3 million(1) helping drive GAN’s first three months’ revenue in 2019 to record levels.

GAN continues to prepare for Pennsylvania Internet gambling, now expected to commence before the end of June. GAN’s client in Pennsylvania, Parx Casino, is the largest single casino property by market share in Pennsylvania. GAN will also be launching PaddyPower Betfair’s ‘FanDuel’ Internet sports betting and casino gaming in Pennsylvania in Summer 2019. GAN is now positioned for substantial growth in regulated real-money Internet gambling in the US following the commencement of Pennsylvania’s Internet gambling market.

GAN is increasingly confident in the long-term prospects for intra-state real-money gambling in the U.S. and believe the opportunity of internet sports betting may now serve as a catalyst for other U.S. states to regulate both internet sports betting as well as internet gaming with recent regulatory progress noted in the States of Ohio, Indiana, Montana and Tennessee.