GAN Limited

Greetings and welcome to the GAN Limited's fourth quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Robert Schor, VP of Capital Markets and IR. Please proceed, sir.

Thank you, and good afternoon, everyone. GAN's fourth quarter and full-year 2022 earnings release was issued today after the market closed and is posted on the company's website at GAN.com. With me today are Dremel Smartfit, President and CEO, and Brian Chang, Interim Chief Financial Officer. I'd like to remind our audience today that we may make forward-looking statements in the call, which are protected under safe harbor afforded by the federal securities laws, and in each case are qualified for the forward-looking disclaimers contained in our earnings release. Please refer to our filings with the SEC to understand how we calculate any of the metrics discussed in today's call. With that, I'll turn the call over to our CEO, Dermot Smartbit. Dermot, go ahead, please.

Thank you, Bobby, and good afternoon, everyone. I look forward to discussing our fourth quarter and full year 2022 financial performance and operating segment results. As major agenda items, we will also discuss the strategic review process we are announcing today, our recent successful sports betting deployment for Wynn Resorts, and our amended Ainsworth exclusive iGaming content distribution partnership that will help reduce our future cash commitments by $15 million. Each of these items underscores a refocus of our business towards segments where we can truly win, notably B2B and sports, and in the B2C division, Latin American operations, and of course related items in our earnings release. Taking a brief look back, our full year 2022 revenue increased 15% to $142 million versus $124 million in 2021. The growth was driven by both our B2C segment or CoolBet.com and our domestic B2B segment. The increased growth in revenue and cost controls led to $6 million of positive adjusted EBITDA as compared to a loss of $3 million in the prior year. Looking at the fourth quarter, the momentum in our revenue growth continued as we generated $36.9 million of revenue, an increase of 21% from the prior year. The growth was enabled by both our B2B and B2C segments. In the B2C segment, active customers grew nearly 50% to 331,000 in the quarter. This was enabled by a strong World Cup where the team delivered a masterful performance to support our B2B clients and, of course, our B2C end-user customers before and during the event. During the World Cup event, we saw new depositing customers, or MDCs, of approximately 47,000, driven by the Latin American region, together with approximately $42 million in sports bets wagered, and the final between Argentina and France, actually resulted in a record $2 million in sports betting handled for a single event. We are optimistic that the new customers we gained during the tournament and the positive experience we were able to deliver will ensure they remain loyal players even after the World Cup. However, while adjusted EBITDA improved to loss of $0.4 million versus $6 million in the prior year on cost-saving measures, we didn't deliver positive results and we must continue to improve our operations and cost containment efforts. In 2023, we're off to an exciting start on several operational fronts. Firstly, we launched GAM Sports with Winbet in Massachusetts in retail in January and earlier this month on mobile on March the 10th of 2023. Secondarily, Coolbet launched in the Mexican regulated market, a country with a large and growing $700 million plus TAM, where we can leverage our proven success in the LATAM regions. And thirdly, we are making progress on our new version 2 Game Stack 2.0 platform, which will result in significant cost savings. We expect to have this up and running by the second half of 2023. Now moving to our financial outlook for the year in the first quarter. For the first quarter, we expect revenue to be in a range of $37 million to $39 million. Unfortunately, for the full year 2023, we are unable to provide guidance at this time, given the nature of our strategic review process. As a result, the variability of potential outcomes prevents us from providing an outlook within a reasonable range. However, we do expect to be in a good position to provide future guidance for the year upon the resolution of these discussions, hopefully in the very near future. I'll now turn over the call to our Interim Chief Financial Officer, Brian Chang, to provide more color on financial and counting items, and then I'll conclude with additional color on strategy and the strategic review process. Brian.