On Thursday, Bragg Gaming Group (NASDAQ:BRAG) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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The full earnings call is available at https://events.q4inc.com/attendee/267144801

Summary

Bragg Gaming Group Inc reported Q1 2026 revenue of 25.7 million Euro, a slight increase of 0.6% year-over-year, with an operating loss of 1.4 million Euro, showing an 18% improvement from the previous year.

The company is shifting its strategic focus towards a high-margin proprietary games model, leveraging AI-driven technology to enhance player engagement and operational efficiency.

Future guidance remains strong with expected full-year 2026 revenue between 97 million and 104.5 million Euro and adjusted EBITDA of 16 to 19 million Euro.

The planned acquisition of Drayden International is seen as a critical growth catalyst, expected to provide over 100 new proprietary game titles and expand market reach into 30+ US states.

Notable management comments highlight the appointment of Matt Davey as non-executive Chairman, bringing extensive experience and anticipated to significantly strengthen the company's growth trajectory.

Full Transcript

OPERATOR

Hello everyone. Thank you for joining us and welcome to the Bragg Gaming Group Inc's first quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press Star one to raise your hand. To withdraw your question, press Star one again. I will now hand the conference over to Stephen Kilmer, Investor Relations. Stephen, please go ahead.

Stephen Kilmer (Investor Relations)

Good morning everyone and thank you for joining us for Bragg Gaming Group Inc's first quarter 2026 earnings call. If you're connected to our online webcast today, you should see our first quarter earnings presentation on your screen and you should have control to flip the slides yourself as you listen to this call. If you have joined by telephone, please note that you can find our earnings presentation as well as the financial results press release on our [email protected] Bragg Gaming Group Inc. Please note that certain statements on this call may constitute forward looking information or future oriented financial information. A full explanation of the risk factors is available on the second slide of our first quarter 2026 earnings presentation titled Forward Looking Statements as well as in the recently filed press release and other public disclosures. Bragg disclaims any obligation except as required by law to update or revise any forward looking statements whether because of new information, future events or otherwise. Any forward looking statements made on this call speak only as of the date of this call. On this call, Bragg Gaming Group Inc CEO Matt Smazic and CFO Robbie Bresler will discuss the company's first quarter performance as well as his planned transaction with Drayden International. We will follow that up with a question and answer session. I'd now like to turn the call over to Matt Smazic.

Matt Smazic (Chief Executive Officer)

Thank you Stephen and good morning everyone. Thank you for joining us for Bragg Gaming Group's first quarter 2026 earnings call. We are Bragg though listed on NASDAQ and the Toronto Stock Exchange. On past calls I have described Bragg's legacy model as supplying games and technology to the regulated iGaming market. But as you saw in our two press releases this morning, we are evolving from that to focus on a higher margin proprietary games first AI driven model stepping into the role of ecosystem architect.. This refocus is defined by several core shifts from volume to quality, shifting away from low margin aggregation volume and third party content dependency to proprietary first IP model and the creation of repeatable game franchises from supplier to architect, changing the core identity from a B2B supplier to the ecosystem architect.. This means managing the entire player funnel from awareness to intent to retention rather than just providing games with continuing focus on key geographies such as North America, Brazil and core European markets from traditional igaming to cross vertical integration Moving beyond the constraints of regulated IGaming to aggressively leverage tailwinds like prediction markets and ADWs. Our goal is to use our existing PAM and HUB infrastructure to achieve cross vertical synergies integrating racing, lottery and sports betting outcomes into dynamic igaming experiences and of course, operational transformation. Embedding proprietary technologies like the Bragg AI Brain to hyper personalize content, predict player behavior and autonomously write code to crush delivery bottlenecks. I will come back on to discuss this more, but since this is all about what you should expect from Bragg as we move forward, I will turn the call over to Robby now for a review of our first quarter financials.

Robbie Bresler (Chief Financial Officer)

Robbie thank you Matson Good morning everyone. On behalf of the management team and everyone at Bragg, I would like to thank you and your ongoing interest in this company and for those of you who are shareholders, we appreciate your continued interest and support to streamline things. All of the numbers I will refer to have been rounded so they are approximate. Also, since our reporting currency is Euros, I will stick to those on this call, but for the benefit of North American investors, we have also provided a US Dollar equivalent conversion in our press release this morning. Finally, recognizing that the focus of our remarks today is primarily forward looking due to the planned Drayton transaction, I will keep my summary of our Q1 results brief. In the first quarter of 2026, revenue was 25.7 million euro, up 0.6% year over year. Q1 2026 operating loss was 1.4 million, an 18% improvement from Q1 2025 net loss for the first quarter was 1.2 million or 0.05 Euro per common share, a 55% improvement from the same period of 2025. Q1 2026 adjusted EBITDA was 4 million Euro, representing an adjusted EBITDA margin of 15.7%, down marginally from 4.1 million Euro, representing an adjusted Ebitda margin of 16%. And in Q1 2025, as of March 31, 2026, Bragg had cash and cash equivalents of 3.4 million Euro. As we move through 2026, we remain very focused on continuing to optimize our product mix and optimize our internal processes and structures, and believe there are significant opportunities to refine and improve our margins and cash flow. Finally, at this stage we affirm our current guidance and continue to anticipate full year 2020 between 97 million and 104.5 million Euro and adjusted EBITDA of 16 million to 19 million Euro, representing an adjusted EBITDA margin of between 16 and 18%. This does not include any impact from the planned Drayton transaction and with that I'll pass the line back to mats.

Matt Smazic (Chief Executive Officer)

Thank you, Robbie. Simply put, we believe that completion of the transaction with Drayton we announced today will mark a critical inflection point in our growth trajectory. Especially, we believe that the transaction will increase our already growing exposure to high margin proprietary content. Indeed, the Drayton transaction will immediately provide Bragg with over 100 additional titles, with more being created by our respective content teams every month as we move forward. This transaction will also power our expansion into emerging and adjacent gaming markets including ADW. This alone will potentially translate into a greater than five fold expansion of our US market reach. While traditional iGaming is currently limited to seven US states, ADW is available in over 30 states. This transaction will further enhance our already formidable technology and AI capabilities. Our BRAG AI Brain initiative has already delivered the cutting edge technology stack needed for horizontal scaling and helped deliver efficiencies that have started to improve our overall cost structures. This transaction will bring proprietary mechanics including hybrid slot engines linked to live racing data. We will further strengthen our long term revenue growth and margin profile by reinforcing our brand strategy as a games first industry leader. And last but certainly not least, it will bring gaming and sports betting market luminary Matt David to Bragg as both a significant investor and our non executive Chairman. In a way, this is what excites me the most. Currently the Founder and Chairman of Tech Corp. Capital, which invests in private and public companies in the global gambling sector, Matt has been active for over 25 years with the digital media, sports entertainment, leisure and gaming ecosystems. With additional specialist experience in government and regulatory roles. Matt has recent experience of manifesting positive momentum with the leading betting and gaming company. He was appointed as President and Executive Chairman of Bet Makers technology Group in January 2023, a period which has delivered a significant turnaround in market performance. As of May 2026, Bet Makers stock is up over 65% in the past 12 months. Matt is an experienced public company executive officer who has overseen more than 10 mergers and acquisitions and helped raise over $2 billion in debt and equity capital to support the companies he's led. Earlier in his career, Matt acquired a small gaming company, NYX Interactive, which as CEO he rebranded as NYX Gaming Group, turning it into one of the most influential firms in modern igaming history as it managed to redefine games aggregation and the distribution of content in the I gaming space. The business was sold to Nasdaq listed Scientific Games in 2018 for approximately US$631 million. As a CEO of NYX Gaming, he developed a successful corporate strategy that generated significant revenue growth and acquired 10 companies including OpenBet, which is now one of the largest aggregators in the sports betting industry, powering over 200 of the world's largest operators including top tier sportsbooks, lotteries and tribal operators processing billions of bets annually. To sum it up, Matt has experience and expertise that is uniquely fitting for evolution into a games first powerhouse and after knowing him for several years, I completely share the sentiment expressed by our current chair Holly Gagnen in our press release this morning. Matt has earned my deep personal admiration and great professional respect. In summary, before the planned rate and transaction, Bragg was well placed to become a global B2B leader in content, content delivery, engagement and player management infrastructure. But this acquisition represents a bolder step beyond that as we strengthen our commitment to crafting captivating proprietary gaming worlds which deliver proven revenue engines for operators and unforgettable experience for players with a particular focus on expansion across the US and Canada. This will be complemented by a refreshed brand presence featuring a vibrant new aesthetic that reflects Bragg's games first commitment. We look forward to providing more details on that in the near future. BRAG already combines battle tested content and player management expertise with smart technology, but this evolution sharpens the focus on what makes BRAG a unique value proposition in the iGaming sector that is a data rich user experience obsessed games first engineering leader. Brag not only supplies the games that today's players demand, but also streamlines everything. This optimizes players end to end journey redefining Bragg's core products into one coherent ecosystem. Now, with the right team, the right technology and clearer Games first focus, Bragg is positioned to lead the future of the global gaming industry. We look forward to updating investors as as we progress. Thank you. Robbie and I are now available to take any questions you may have.

OPERATOR

We will now begin the question and answer session. Your line will remain open for follow up questions. If you would like to ask a question, please press Star one To raise your hand. To withdraw your question, press Star one. Again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q and A roster. Your first question Comes from the line of Jack Van der Aard with Maxim Group. Jack, your line is open. Please go ahead.

Jack Van der Aard (Equity Analyst)

Okay, great. Good morning guys. Congrats on all the positive announcements and also welcome to Matt Davie. Assuming the acquisition closes, a lot of transformational positive announcements here to cover. So I'll try to touch on a few things. I guess just for the quarter itself, maybe for Robbie. Was this acquisition planning. I'm sure you were heavily involved with how did this kind of impact if at all the results for the quarter and just sort of the strategy and the momentum of the existing business.

Robbie Bresler (Chief Financial Officer)

Thanks for the question. I'd say not at all. A lot of the directional flow and the strategic thoughts that where we want to keep taking this business to which is North American focus content focused that's been in the works for and in our DNA for quite a long period of time. So this deal is really complementing the direction that this company is on and I'd say it was a complete non factor and in fact it's really enhancing how we want to strategically make sure our business is aligned so we can execute once we become one company. With Drayton on this content focus North American strategy.

Jack Van der Aard (Equity Analyst)

Excellent. Excellent. And then maybe for Matt too, just this, this with this acquisition, I know it hasn't closed yet so whatever you can provide is helpful. It sounds like this really kickstarts even more. I mean us us is already ramping. It looks like it was a little slower growth pace this quarter. But when with this acquisition coming in, I think I heard over 100 new titles are being added, proprietary titles. And then you also expand up I guess 35 states versus the 7 you're in without providing too much. It just. It sounds like that's very meaningful on the top line I'm assuming is that a fair directional comment? And how did what are kind of the overlap or synergies? How do these games compare to the success that Bragg's games top titles have had? Thank you.

Matt Smazic (Chief Executive Officer)

Yeah, yeah. Thank you. So this acquisition obviously accelerates our transition into higher margin proprietary content led business focused on becoming a games first global I gaming ecosystem. Drayton adds game studios, adds aggregation technology and distribution, adds AI capabilities and adds new distribution opportunities, particularly in the United States. What we call alternative gaming markets through advanced deposit wagering technology and distribution. We expect this transaction to further increase the exposure to proprietary content and ip, strengthen our AI and personalization capabilities and improve our long term margin profile and revenue mix and like I said, further accelerate growth in North America, especially in the in the United States. You asked the question about the expansion into 30 plus states. So the the ADW market is sort of like a a sleeping giant that is now waking up. That's how we see it. The legal framework has existed for decades, but it was technically impossible to deliver a high fidelity slot style experience over over it until very recently. And it's legally operational in 30 plus US states including markets like California, Florida and Texas where traditional online slots remain unregulated. We believe there's a massive growing demand for fast cycle entertainment in in in in a number of these states and players in non I gaming states have obviously been waiting for online casino or igaming legislation for a while and this ADW model gives it to them legally. Drayton adds, like you said yourself, game titles, more than 100 of those and proprietary slot mechanics but also AI driven slot development tools, distribution infrastructure and performance marketing capabilities. These are deployable in current markets that Bragg is in as well. Some of the titles and some of the studios are already distributed, deployed and distributed via bragging and we expect a much closer cooperation with these studios to deploy their portfolio of games globally as well.

Jack Van der Aard (Equity Analyst)

Excellent. And then maybe just one more last question that I'll hop back in the queue as far as the pro forma financials and just kind of what we can expect as we get closer to the closing date. What do we have access to as analysts and investors at the moment in terms of financials and then would we be expecting a pro forma sort of financial statement issued? Thanks.

Robbie Bresler (Chief Financial Officer)

Thanks for the question. So just to give some color in terms of financial performance and makeup of the assets that we've acquired currently we see these assets delivering about mid single digit millions in terms of revenue and that's without synergies. So we do think there's lots of potential on these assets and the power that BRAG brings to increase that performance on a revenue basis. This is these assets are EBITDA positive and when we looked at valuation from a revenue perspective and from a comparison to precedent transactions, the valuation is quite appealing. What also comes with these assets is 1 million US of excess cash. So that's, you know, that package of being able to get more assets focused in the part of our business that really we believe is driving the most value, which is US focused proprietary content. This is extremely attractive. Having much more talent and assets to execute on strategy is extremely appealing. And Matt's talked a lot about Matt Davies pedigree and experience and the team that comes along just really enhances the part of our business which we believe drives the most value. So we do see lots of potential to move these assets beyond current performance. But even at a current performance level, the attraction from a revenue multiple point of view was there. And again, just to make it clear, there is US$1 million of excess cash that comes with the transaction.

Jack Van der Aard (Equity Analyst)

Excellent. Got it. I appreciate all the toddler and congrats again on all these announcements. Look forward to watching it play out. Thank you.

OPERATOR

If you would like to ask a question, please press Star one to raise your hand. There are no further questions at this time. I will now turn the call back to Matt Smazi for closing remarks.

Matt Smazic (Chief Executive Officer)

Thank you very much for joining our call today. As you can see, we executed well across our business in the first quarter and looking forward, the acquisition of Drayton represents a highly strategic step forward for Bragg as we evolve into proprietary games first AI driven ecosystem architect. We are also energized by the pending appointment of Matt Davey as non Executive Chairman which will significantly strengthen our leadership team as we move forward with this bold new vision for Bragg. And we believe that Matt's experience building and scaling global gaming platforms, combined with his deep industry relationships will be invaluable as we execute on this next phase of growth. We are in very exciting times here at Bragg and we thank you for your interest and support and again thanks everyone for joining our call today.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.