“The third quarter of 2020 has delivered a significant step forward for GiG as a B2B focused organisation,” wrote CEO Richard Brown, as the company’s quarterly revenues reached €17.9m with EBITDA of €3.2m.
Adjusted revenues were recorded at €14.2m – an increase of 42% from €10.0m year-on-year, while EBITDA was up by €3.6m.
This growth, said Brown, was complemented with strong success in the platform sales funnel which resulted in six additional long term contracts signed in the quarter.
In addition, two contracts have been signed already in the fourth quarter, adding up to an integration pipeline consisting of 15 new brands – six of which are land-based operators going online and eight in new regulated markets.
While platform services had positive EBITDA in September, EBITDA for the quarter still ended at €-0.1m, but this showed a 96% improvement on the -€2.1m in Q3 2019 and a 91% increase from the previous quarter (Q/Q).
GiG admitted that recent restrictions in Germany are anticipated to have a negative impact on earnings in the short term, but remains confident that the new regulation will drive demand for its products longer term and secure growth for both Platform Services and Paid media. The signing of Tipwin and other such contracts, it added, will provide long-term benefits in the regulated German market.
By contrast, an operational highlight for GiG was the signing of a strategic partnership with Betgenius, which will see it bring together GiG’s platform technology with Betgenius’ end-to-end live data, trading and risk management services. The partnership signed its first client in September, a long-term contract with a major LatAm operator.
Revenues from Media Services, meanwhile, were €8.6m in Q3 2020 – up from €8m year-on-year. EBITDA was €4m, down from €4.2m in the corresponding period of 2019.
“We delivered stable revenues in our Media division despite the impact of consumer demand subsiding as global lockdown eased over the summer months, but still outperforming a more normalised rate delivered in the first quarter by 5%,” said Brown.
“Our Media activities in the US continued to gather pace during the quarter and was the first quarter where we saw a breakthrough in customer acquisition in the market via both publishing and paid channels.”
This US momentum was highlighted by the growth of GiG’s proprietary US affiliate site World Sports Network (WSN.com) over the quarter. It is now present in nine US states having received affiliate licences in West Virginia and Tennessee.
Looking ahead, Brown said GiG will continue its focus on cost control, execution and global expansion. “During the third quarter we continued to execute along our overall cost saving programs with opex down 14% year over year, while still absorbing around €500K of one-off costs related to the restructuring of the business,” he said.
As part of this restructuring, the number of employees decreased from 695 to 467 year-on-year, with around 40 supporting the transition agreement with Betsson Group. GiG completed the sale of its B2C assets to Betsson this April in a €33m deal.
Brown concluded: “GiG is pleased with the overall development in 2020, and the contracts signed over the last months and cost initiatives implemented secures further sustainable growth in 2021.
“Events outside GiG’s control, including slower than anticipated onboarding of new clients as COVID-19 delayed contractual processes and uncertainty of the effects of the regulatory restrictions recently implemented in the German market, may have a short term impact.
“Thus, revenues for 2020 are expected to be in the lower range of the previous guiding €52m to €57m, with a corresponding reduction in EBITDA, expected around €11m, compared to the previous range of €12m to €15.0m.”