Bragg Gaming Group Inc.

Good morning, everyone. My name is Sarah, and thank you for joining the third quarter of 2024 Earnings Conference Call for Bragg Gaming Group. I'll shortly hand the call over to Bragg Gaming Group CEO, Natash Mazzi, who will comment on Bragg's third quarter performance and Bragg's interim CFO, Robbie Bressler, who will review and discuss the company's third quarter financial results. I would like to remind you, if you are not already doing so, that you can follow this earnings call presentation live from Bragg's investor website at investors.bragg.group. That's investors plural with an S. Then go to the events and presentation section. On this call, there will be a review of Bragg's financial and operating results for the third quarter of 2024. Following these prepared remarks, the conference call will be opened to a question and answer period. I would like to remind you that certain statements made on this conference call and the responses to various questions may constitute forward-looking information or future-oriented financial information within the meaning of applicable securities laws. If you have not already done so, please familiarize yourself with Bragg's full explanation of these risk factors, available on the second slide of the Bragg Gaming Group third quarter 2024 earnings presentation. titled Forward Looking Statements, which is published on the website at investors.bragg.group. This information is also available in Bragg's recently filed third quarter earnings press release and other publicly available disclosures. I'd like to turn the call now to Mateusz Mazzi, Chief Executive Officer of Bragg.

Good morning, everyone. My name is Mateusz Mazzi. I'm the chairman and CEO of Bragg. For this call today, I'll start with an update on the strategic review process that has been running. Then we'll go through the third quarter operational highlights, including our key launches and latest news. Then I'll pass the line to Robbie, who will present our latest financial results. When Robbie has taken you through the numbers, I'll give you an update on the positive change I have been implementing since returning as both chair of the board and CEO a little over a year ago. And after that, Robbie and I would be happy to answer any questions you may have. I'll start with today's announcement that the board has concluded the strategic review process that we announced earlier this year. In March 2024, the company announced the formation of a special committee comprised solely of independent members of the board. to conduct a review of strategic alternatives for maximizing shareholder value. This committee, together with its advisors, Opel Capital and Blake Castles and Graydon, evaluated a wide range of strategic alternatives for maximizing shareholder value, including a potential sale or merger of the company. The committee held discussions with over 70 potential counterparties. They executed non-disclosure agreements and shared confidential information with over 25 counterparties. And they received multiple non-binding proposals. After careful consideration, the special committee and the board unanimously determined that none of the proposals received reflect the company's intrinsic value or current and projected financial performance. As a result, the board has elected to conclude its review and has disbanded the special committee. Although the process has now concluded, the board will continue to be open to and consider all opportunities for enhancing shareholder value. We remain extremely confident about the company's business plan, operating strategy and financial prospects. Turning now to slide five, in the third quarter, I am pleased to announce that we delivered meaningful growth across all of our key performance indicators, delivering 16% top line growth year over year, with gross profits up 18% and adjusted EBITDA up 7%. We continue to grow our position as a supplier of online casino games in the United States, something which has been a key focus for BRAG over 2024, and something I'm pleased to report that we're capitalizing on. Notably in the U.S., we have been growing revenues from games, which come from our proprietary content studios, Wild Street Gaming, Atomic Slot Lab, and Indigo Magic at a particularly accelerated rate. These are high-margin products, of which Bragg is the IP owner, the developer, the technology owner, and the distributor. Outside of the U.S., as well as our exclusive content business, We continue to grow our PAM, that's player account management technology, and turnkey solution business. During the third quarter, we launched our sixth PAM customer in the Netherlands with the iconic Hard Rock Casino brand in a turnkey deal, which includes our product delivery, content aggregation, and managed services. It's been great to support Hard Rock in their Dutch expansion, and we're looking forward to a long and fruitful relationship. Also in the Dutch market, we successfully launched the Canby Sportsbook with our valued partner 711.nl, adding a new product vertical and further cementing our great relationship with the Dutch licensed operator. During the third quarter, we were also busy working on developing and implementing solutions to the new regulatory requirements in the Netherlands, which include the introduction of monthly deposit limits, which came into effect on October 1st. To date, the impact of these new restrictions has broadly been in line with our expectations. The Netherlands continues to be an important market for us, and we continue to work with our operator partners in the jurisdiction to further optimize and refine our products in response to this new regulatory environment. Throughout the third quarter, we continue to grow our content distribution reach in the US market, building existing relationships with our operator partners and expanding into new states. Third quarter examples include the expansion of our existing agreement with Caesars Entertainment to include provision of exclusive content into Pennsylvania, as well as into Ontario and Canada. Our new content launch with Fangio in Pennsylvania as well as expanding our relationship with Bet365 to include New Jersey. Now I'm going to turn the line over to Robby to discuss our financial results. Robby?

Thank you, Matt, and good morning to everybody. I will now cover our financial results for the third quarter of 2024. Total revenue for the third quarter was 26.2 million euro, another record high up 15.9% compared to Q3 2023. Additionally, Q3 2024 gross profits grew by 18% to €14 million, with gross profit margin rising by 99 basis points to 53.5%. Adjusted EBITDA for the quarter also grew by 7% to €4.1 million, our third consecutive sequential quarter of growth. Our adjusted EBITDA margin was 15.6%, slightly lower than the 16.9%, We reported in the same period last year as expected. A strong quarter and record growth for the group was no more exemplified than in our U.S. numbers, where growth in content distribution helped drive a 40% increase in proprietary content revenue globally compared to the third quarter of last year. We reiterate our full-year revenue and adjusted EBITDA guidance at $102. to 109 million euro and 15.2 to 18.5 million euro respectively, noting that we are currently tracking to the lower end of the guidance ranges provided. Moving on to our product mix, as noted on slide eight in the third quarter of 2024, revenue from PAM and turnkey operations was 5.7 million euro, representing 21.8% of total revenue compared to 4.6 million representing 20.6% of total revenue in the third quarter of last year. Total content revenue was €20.5 million in the third quarter of 2024, representing 78.2% of total revenue, while in the third quarter of 2023, total content revenue was 17.9%, representing 79.4% of total revenue. Turning to the balance sheet, as of September 30th, 2024, we held 11.6 million Euro in cash and cash equivalents. During the quarter, we fully settled the remaining balance of the LEND convertible debt in cash. Our only remaining debt facility is a 7 million USD secured promissory note due in April of 2025. Networking capital excluding deferred consideration and promissory note at the end of September 30th, 2024 amounted to 11.3 million Euro compared to €5.1 million at the beginning of the year. Before handing the call back to Matt, I would like to make a few comments on our 2025 outlook. FRAG is actively advancing a robust pipeline of opportunities that is anticipated to drive strong momentum as it enters 2025. The outlook for 2025 remains positive, with expectations of sustained double-digit top-line growth