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  • Q4 2023: GAN revenue drops 17% ahead of Sega Sammy merger
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GAN generated $30.7m in revenue during Q4 2023, a 16.9% decrease compared to Q4 2022, according to its full-year 2023 earnings release.

Q4 revenue consisted of $11.8m from the firm’s B2B segment, down 16.5%, and $18.9m from the B2C segment, down 17.1%.

By geographical region, GAN saw growth in Europe, its largest region by revenue, as it generated $12.1m during the quarter, up 3.1% year-on-year.

Revenue in the US, meanwhile, fell by 29.8% to $8.5m, while Latin American revenue dropped 36% to $7.1m.

The Rest of the World segment generated a further $3m of the firm’s total revenue, amid a year-on-year increase of 52.6%.

Following the reduced revenue, the company suffered a larger EBITDA loss in Q4 2023 than in Q4 2022, as it widened from $368,000 to $3.9m.

In spite of the larger EBITDA loss, the company’s net loss was significantly reduced compared to Q4 2022, as it fell from $147.7m to $9.4m.

The reason behind the substantially larger net loss in Q4 2022 was a non-cash impairment charge of $137.1m during the quarter.

Full-year 2023 results

The firm’s Q4 results brought its full-year 2023 revenue to $129.4m, down 8.6% from $141.5m in 2022.

B2B revenue was down 20.2% to $43.2m, while B2C revenue dropped a more modest 1.4% to $86.3m.

In the B2B segment, the decrease in revenue was primarily driven by a decrease in contractual revenue rates following the expiration of an exclusivity period with one of GAN’s customers.

Meanwhile in B2C, the company said the revenue decline was attributable to a decline in active customers in Latam.

Adjusted EBITDA for the year came in at an $8.4m loss, compared to positive EBITDA of $6m in 2022.

That swing to negative earnings was driven by a decrease in revenue and development activities that qualify for capitalisation within the B2B segment, GAN said.

As in Q4, the company’s full-year net loss was down signifnicantly in 2023, as it fell from $197.5m to $34.4m as a result of non-cash impairment charges of $166m during 2022.

GAN did not publish any commentary from its senior executives alongside its Q4 and full-year 2023 results, nor did it host a conference call to discuss the results.

The company’s merger with Japanese video game giant Sega Sammy is still expected to close in late 2024 or early 2025, pending approvals.

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