Bragg Gaming Group Inc.

Good morning, everyone. My name is Eric, and thank you for joining the first quarter 2025 earnings conference call for Bragg Gaming Group. I'll shortly hand the call over to Bragg Gaming Group CEO, Mateusz Mazzi, who will comment on Bragg's first quarter 2025 performance, and Bragg's CFO, Robbie Bressler, who will review and discuss the company's first quarter 2025 financial results. I would like to remind you, if you have not already done so, that you can review Bragg's results presentation on the company's investor website at investors.bragg.group, that's investors plural with an S, then go to the events and presentations section. On this call, there will be a review of Bragg's financial and operating results for the first quarter of 2025. 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 BRAG's first quarter 2025 earnings presentation, which is titled Forward Looking Statements, and which is published on the website at investors.brag.group. This information is also available in BRAG's recently filed first quarter of 2025 press release and other publicly available disclosure. 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 CEO of Bragg. On this call today, I'll start with our first quarter highlights and operational updates. Then I'll pass the line to Robby, who will discuss our latest financial results. When Robby has given his commentary on the numbers, I'll discuss more about our strategy and operations, as well as our outlook for the rest of 2025. And after that, Robbie and I will be more than happy to answer any questions you may have. For those of you that are not familiar with BRAG, who exactly is BRAG Gaming Group? We're not just another name in the iGaming world. First, we're the architects of user experience. We create and deliver cutting edge casino games straight from our own studios and alongside a handpicked selection of the most disruptive third party creators out there. Second, we're the silent engine behind some of the giants of iGaming, sports betting, and iLottery. We empower operators to launch into the markets and dominate their markets with our proprietary player account management solution and a full in-house build delivery and engagement tech stacks. We arm online casino, sports betting, and lottery operators with the tools to launch flawlessly, scale relentlessly, and optimize for maximum success. Forget glitches, forget headaches. We deliver power and control to our partners. And third, we're obsessed with the player. We don't just look at data, we decode it. We leverage the information coupled with advanced analytics and cutting edge AI to supercharge player engagement. We maximize revenue potential and build smarter, more efficient iGaming operations. In short, we're building the future of user experience. This is BRAC Gaming Group, and what you're about to hear is going to redefine your expectations. In the first quarter of 2025, we're reporting 7.1% revenue growth compared to the same quarter last year. And I'm also highlighting that excluding the Netherlands, revenue growth was a robust 27% over the same period. As is widely reported, the Netherlands market has slowed in recent quarters due to regulatory pressures, a challenge faced by all operators and suppliers serving the regulated market there. I'm pleased that BRAC has shown resilience under these pressures, is reducing the exposure to the Netherlands, and is seeing strong growth in markets such as the United States and Brazil, which I'll talk about more later. I'm delighted to share that we're executing on strategy and moving the metrics that we believe are most important to increase shareholder value. This includes demonstrating operational leverage, which we did in Q1, improving our product mix with a greater proportion of margin accretive revenue, and increased cash generation, which we did in Q1 as well. And Robbie will talk more about this when he takes you through the financials. After that, I will talk about how Bragg is growing in the expanding US online casino market. And not only is the market as a whole growing, but we saw triple digit growth in US GGR derived from Bragg's proprietary content, such as our recent smash hit, Dragon Power Triple Gold, produced by our in-house studio, Wall Street Gaming. Operationally, BRAC has had a busy first quarter of 2025 with significant developments across the business. As we announced during the quarter, on the 1st of January, we launched our content in the newly regulated Brazilian iGaming market, a key strategic territory for us, as we expect 10% of our revenue this year to come from the Laram region. We also announced our games development and remote game server technology agreement with Caesars Digital, leveraging the value of our in-house game development expertise as well as our proprietary technology. The first game to launch under this partnership, Caesars Palace Signature Multi-Hand Blackjack Surrender, was released just this week, and we congratulate Caesars' newly established in-house game studio Empire Creative on this launch and first of many more to come. We continued the North American rollout of our exclusive content with our Lotto Quebec launch, and we doubled down on our commitment to expanding our localized games portfolio in key markets around the world with our investment in Rapid Play, an exciting Brazilian casino content studio. At the board level, I congratulate Holly Gagnon, recently appointed chair of the board, moving up from her excellent recent service as lead independent director, and allowing me to focus on leading our operations as CEO. Lastly, we repaid $5 million of our $7 million secured credit note, while at the same time extending the repayment of the remaining $2 million until June 2025, while we realize a new credit facility with improved terms. Now I'm going to turn the line over to Robby to discuss our financial results. Robby?

Thank you, Matt, and good morning to everyone. I will now cover our financial results for the first quarter of 2025. Total revenue for Q1 2025 was €25.5 million, up 7% compared to Q1 2024. As expected, overall top-line performance in Q1 trails our Q4 run rate. This trend is consistent with seasonal patterns in the iCasino market, where Q1 is typically the softest quarter of the year. Factoring out the Netherlands, which decreased 19% compared to Q1 2024, Due to regulatory changes such as deposit limits imposed on players and gaining taxes increases of 4%, BRAG's revenue was up a robust 27%. The revenue growth we see outside of the Netherlands underscores the strong fundamentals of the business and reflects an exciting trajectory in growing markets such as the US and Latin America. With a higher concentration of revenue coming from proprietary content, Q1 2025 gross profit margin rose by 612 basis points to 56% compared to Q1 2024. While the Netherlands contracted in Q1 2025 compared to Q1 2024, we expect conditions to improve as operators on our PAM maintain strong market positions and subscale competitors face rising margin pressures that could force them out. At the same time, regulators are intensifying efforts to combat black market activity, a positive trend across Europe that supports BRAC's focus on regulated markets. We are extremely excited about the triple-digit growth of our U.S. revenue in Q1 of 2025 compared to the same period last year. We're also encouraged by the recent developments out of Ohio this week, which signals real momentum towards the possibility of legalization of iCasino in that state. We're well positioned to capitalize on these opportunities. Our integrations with leading operators are already in place, and the incremental cost for us to launch in new states, such as Ohio, is minimal. The addition of Ohio alone could expand the total US iCasino market by more than 20% or $2 billion. A major opportunity for Bragg as we continue to scale in regulated North American markets. Moving to the bottom line performance in cash, adjusted EBITDA grew by 19.7% to €4.1 million in Q1 2025 compared to Q1 2024. Our adjusted EBITDA margin was 16%, 169 basis points higher than the same period last year. Turning to cash flow, we generated 4.5 million Euro in operating cash during Q1 2025, a 61% increase from 2.8 million generated in Q1 2024. A key metric that we use to assess our operational cash performance is adjusted EBITDA, less capitalized development costs. In Q1 2025, adjusted EBITDA, less capitalized development costs amounted €1.4 million, up 49% compared to Q1 2024, with a conversion ratio of 34%. Finally, excluding non-recurring exceptional items and FX-related impacts, we delivered €0.9 million in free cash, highlighting the positive cash contribution for our increasingly proprietary content-focused revenue mix. Q1 bottom-line performance and cash generation illustrates our ability to achieve operational leverage and focus the business on capturing more profitable revenue. Turning to our product mix, we saw strong momentum in Q1 2025, driven by a continued shift towards high-value products. Proprietary content reached a record 15.5% of total revenue, reflecting the growing success of our in-house titles. particularly in North America. Revenue from proprietary content grew 62% year over year to 3.9 million Euro, up from 2.5 million in Q1 2024, a key milestone in our strategic focus on owned IP. Expanding our proprietary offering remains a core strategic priority. It enhances margins, deepens operator relationships, and strengthens our competitive position as demand for differentiated content continues to grow. Our pan and turnkey solutions delivered solid growth, with revenue rising to €5.2 million in Q1 2025, or 20.5% of total revenue, up from 18.5% a year ago. At the same time, aggregated third-party content declined to 45% of revenue, down 570 basis points year over year. This deliberate shift in our product mix continues to drive profitability. As a result, both margins and cash flows are improving, highlighting the operational leverage from scaling proprietary content and the high margin platform solutions. We expect this positive trajectory to continue with our evolving product mix as a key driver of sustained margin expansion and long-term value creation. Turning to the balance sheet, As of March 31st, 2025, we held €10.8 million in cash and cash equivalents. Subsequent to the quarter, we repaid €5 million USD of the €7 million USD secured prong note outstanding. We remain on track to pay the remaining balance in Q2 2025 and have made strong progress towards securing a lower cost standby revolving capital facility. The facility is expected to enhance our financial flexibility and position us to pursue high-impact strategic growth opportunities. I will now hand the call back over to Max.