As is customary around this time of year, many gaming companies are releasing their latest financial reports. There have been mixed results in the industry for the second quarter of the year, and GAN Limited has added its name to the list.
The online gaming software provider, which purchased iGaming and online sports betting operator Coolbet two years ago, had varying degrees of success in Q2. Overall, according to its announcement, its unaudited financial standing for the quarter was $35 million.
That’s 2% better than the $34.9 million it reported for the first three months of the year. However, several negative attributes kept the results from being greater.
Q2 Delivers Ups and Downs
GAN, with access to New Jersey, Pennsylvania and other states in the US, saw considerable growth in its B2B operations during the quarter. It reported a 36% quarter-over-quarter improvement, taking in $14.2 million. In Q1, it still had decent success, closing the period with $10.4 million in revenue.
However, B2C operations didn’t do as well. The company’s revenue total for the segment was $20.8 million, down 13.3% from the $24 million it saw in the previous period.
Part of the drop was beyond its control. The UK-based company has operations across the globe, and currency exchange rates moved significantly during the quarter. As a result, this impacted the performance.
In addition, GAN saw lower sports margins during the period. This was partly due to the drop in activity that typically accompanies the second quarter of each year.
Both our B2B and B2C segments continue to demonstrate unique technology and capabilities, as customer adoption and new launches remain on a positive trend. Gan is now licensed in 16 U.S. states [and] Canada and has begun the initial stages of entering the Mexican market,” said GAN CEO Dermot Smurfit.
Coolbet’s operations helped to slightly offset the losses as it saw an increase of 8% in its wagering operations. However, it, too, had to contend with the currency exchange variations that hit GAN.
As a result, the company’s gross profit for Q2 was $24.5 million. In Q1, it had gross profit of $24 million, giving it a slight 2% increase.
Looking forward, the company has lowered its full-year revenue expectation. The figure will be in the range of $142.5 to $150.4 million. Last year, it reported gross profits of $84.1 million and a net loss of $24.9 million.
New Funding to Drive New Growth
This past April, GAN secured a new fixed-term credit line that gave it access to $30 million. That amount was offset by the $2.4 million it had to pay in associated costs to receive the funds, but the loan helped GAN have $49.1 million in cash at the end of Q2. At the end of last year, it was only holding $9.6 million in accessible funds.
The money will help GAN continue to expand and possibly provide a stronger foundation for Coolbet. The platform now has over one million registered users, according to the company, and the arrival of the NFL and English Premiere League seasons means sports betting is on the rise.
The last six months have been volatile for GAN’s stock. It trades on NASDAQ under the ticker GAN and, in February, was trading at $6.67. It since dropped to a low point of $2.88 on July 15 before beginning a slight rebound.
The financial results for Q2 allowed it to bump up to $4.34, but it didn’t last. As of this morning, it was down again to $3.52.
The stock’s all-time high was $30.45, which it registered on February 12 of last year. Since then, with one brief exception, it hasn’t come anywhere close to trading at that level.