GiG Software PLC

Hi, and welcome to Redeye. Today we are joined by Geek Software, who will present their Q1 report. It will be presented by CEO Richard Carter and CFO Phil Richards. And after the presentation, we'll have a Q&A, which will be moderated by me. And if you have any questions, please send them through on the website. With that, I will leave over to Richard Carter, please. Thank you.

Good morning, everybody, and thank you for joining us for our 2025 quarter one results presentation. It's been another extremely active and eventful period for GIG, and we're very excited to be updating you this morning on all the progress we're making across our business verticals. As with our previous presentations, I will kick off by talking us through the key highlights. Then I'll hand over to our CFO, Phil Richards, who will take you through the financial review. Before, I'll come back and update you on our strategic progress and on our outlook. So turning to our Q1 key highlights, I'm pleased to report another strong period of performance with revenue increasing by 10% year on year to 9.1 million and adjusted EBITDA expanding by 1.2 million to 0.3 million. And this strong performance was driven by a combination of improved operational performance and execution, our strengthened product portfolio and new customer launches. We continue also to secure new agreements, and we signed nine during the quarter, including with our key customer, Casino Gran Madrid. I think it's worth just pointing out that this momentum with getting a new contract is being driven predominantly by our upgraded product offering, and I'll touch on that a little bit further along in the presentation. We also continue to see a strong new partner launch and we launched four new brands during the quarter. We have three brands that will launch imminently and we expect to launch six brands for the whole of Q2. We also continue to be obsessively focused with streamlining processes and eliminating duplication. And therefore, during Q1, with a focus on this cost optimization, we decided to implement a plan to migrate our Spanish clients off our legacy Alira platform onto our new next generation CoreX platform. And we expect that to trigger significant cost savings as well as material revenue opportunity. And again, I'll talk about that a little bit later when I review our strategic progress. We ended the quarter with a healthy cash position of 4.9 million. And as a reminder, we have access to an additional 2 million RCF. Now I'll hand over to Phil, who will take you through the financials.

Thanks, Richard. Good morning, everyone. So I'm going to start off by talking about our financial summary and where we got to in Q1 2025. We hit revenues of 9.1 million up 10% year on year with an adjusted EBITDA of 0.3 million, which is up 1.2 year on year as well. This is a second consecutive quarter, a positive EBITDA and demonstrates the momentum that we're taking through from Q4 is being delivered on in Q1 2025 as well. Our cost base decreased year on year. despite the revenue increase, which is something I'll touch on a little bit later on in our presentation. If I look at where the revenue growth came from, when I look at the year and year growth, So predominantly, this revenue growth is coming from new launches and customer growth, which is really, really exciting. It's a great mix of customers we have. They're growing well. And all of the new launches that we talked about during 2024 and coming into 2025 has helped us to deliver this significant revenue growth year on year as well. We have new setup fees as well from partners to be launched in 2025. And as Richard mentioned, we've got a very exciting pipeline of launches coming up within Q2 2025 and onwards from that. If I then take a look at our cost base and what is it comprised of? So predominantly, being a SaaS tech business, we have personnel costs, we have marketing expenses and other administrative costs, including things like hosting costs, etc. We've had a massive focus on our cost base and ensuring that this is decreasing quarter on quarter, year on year, and keeping this steady throughout 2025 whilst maintaining our revenue growth and supporting that growth as well. It's an extremely important part of our business. And as we've guided for the full year in terms of our EBITDA, this is what's going to be crucial to delivering that 10 million EBITDA that we guided for 2025. Q1, so a little bit of seasonality. There's an event in Q1, ICE in Barcelona, and that's always typically one that we display at. And therefore, it spikes a little bit in marketing as a one-off cost. But you'll see that then being stripped out in Q2, Q3, Q4 onwards as well. So how does that look from a bridge perspective, getting us from Q1 2024 to Q1 2025? So the investments we made during H1 2024 continue to impact year-on-year and personnel costs. We continue to invest in our people, making sure we have the best people there that can guarantee the delivery of the strong growth trajectory that we have forecasted and guided for for the year. However, we still maintain a very, very tight focus on our cost control. And that's what you'll see when in the 0.4 decline in other operating expenses coming through there. And we expect to have additional cost savings coming through this year and into next year, which is going to touch on some of these a little bit later on in our presentation. So how does this all add up to where we get to in the adjusted EBITDA? I'm really, really pleased with the development of EBITDA and how the revenue growth is dropping through to the bottom line, but also how our cost focus is increasing our EBITDA. It's up 1.2 million year on year, and we are only adjusting our EBITDA for share-based payments of 0.1 million. So it's a very clean EBITDA that we are providing to the market now. And this is, as I say, the increase has been driven both by revenue increase, but also by our focus on cost control. So where does this all add up to in terms of cash generation? So as we guided previously, we're looking to be generating cash from the end of Q3 to Q4 onwards. And therefore, our focus is on making sure that we are bringing down the cash burn month on month, quarter on quarter. We had our final receivable from Gen2 Media settled during Q1 and the last payment in April this year as well. And we ended up at the end of March with a cash balance of 4.9 million. As Richard alluded to, we have an additional 2 million RCF, which is available for utilization. And in addition to that, as I said, we received our final payment from Gen2 in April this year as well. And with that, I'm going to hand you back to Richard, who is going to provide an update on our strategic progress and the outlook for 2025.

Thank you for that, Phil. So let me now take you through how we are executing against our strategic growth pillars and how that's going to help position Gig to accelerate both our revenue, our EBITDA and our cash flow growth through the rest of 25 and beyond. So as a reminder, we have four key strategic growth pillars. One, enhancing our technology and product offering. Two, improving our operational execution and cost savings. Three, new market expansion. And four, new business growth. So let's start by having a look at how the recent enhancements to our technology and product are helping Gigg position themselves to accelerate revenue growth. Firstly, let's start by looking at Gigg is now one of the very few full turnkey suppliers offering an end-to-end suite of products with market-leading positions in all the key product verticals, sports betting, platform, social casino, surrounded by our market-leading AI proprietary tools. Secondly, we're in 29 regulated markets, and that gives us one of the largest regulatory market penetrations in the sector. And with the enhancement and the investment we put into our technology, we're now able to enter regulated markets at a significantly lowered timeframe. And as you can see from this slide, that enables GIG to be strategically placed at the heart of the sector and enabling us to be positioned to capture incremental growth. Now looking at our second key growth pillar, which is all about improving operational efficiency and execution. And as I already commented, we decided during Q1 that we're going to migrate our Spanish clients from our legacy Alira platform onto our next generation CoreX platform. And then we expect to realize at least 1.5 to 2 million of cost savings from doing this. And we expect that to be fully taken through 2026 and on an annualized basis in 2027 to be delivering that full amount. Now, we also expect to see a very significant revenue opportunity here and in excess of our cost savings target. Spain is a very, very important market for GIG and it represented over 20% of our revenue in 2024. And so by moving off our legacy Alira technology onto our next generation CoreX platform, with its more dynamic, scalable, and personalized technology stack, and its greater front-end features, we believe that our Spanish clients will be able to compete more aggressively, will be able to generate higher incremental revenue, and in turn, that will lead to Gig generating higher revenue. So what's the plan? Well, we expect our first four customers to be migrated by the end of this year, and then with the remaining customers all to be migrated in the first six to eight months of 2026. And then the Alera Spanish environments to be discontinued in Q4 2026. The majority of the cost savings are going to be coming from a reduction in technology headcount, as well as a sizable reduction in hosting and IT costs. We expect to realize 0.7 million of these targeted costs in 2026, with the remaining costs coming through on an annualized basis by Q4 2026. Now let's take a look at new partner launches and new market expansion. So we launched four new brands in Q1. As I said, we are going to launch three brands imminently, and we target six brands by the end of Q2. And then in Q3 and Q4, we're targeting nine brands each. And that will give us a total of 28 partner launches, which is 75% year-on-year growth. And that's going to come from a mix of existing and new customers. Now, in terms of market expansion, we've recently launched into a new market, the sweepstakes market, which is estimated to be worth 6 billion euros. And we'll shortly launch into the Philippines market. And later in the summer, we'll launch into the Swiss market. And those three combined markets will give us an addressable market of over 10 billion euros. And that will increase the gig total addressable market by more than 25% this year. Now, underpinning new market launches is our sales pipeline. And I'm pleased to report another strong period where we added 4 million to our pipeline with 20 million at the end of the quarter. And looking forward, we expect further strong momentum driven by new markets and also our upgraded product offering, especially our sportsbook. Now let me just turn to our revenue bridge. And as you can see from this slide, the key driver of our revenue growth this year is going to come from new customer launches, which equates to 7.4 million, and that's 60% of our growth, with the remaining growth coming from existing customer growth, which is just under 20%, which is 2.2 million, and then the remaining 20% to come from setup fees and other revenue at 2.6 million. And that's how we get to our 44 million revenue guidance. So in summary, we made a strong start to 2025 with double-digit revenue growth and our EBITDA expanding by 1.2 million. And we're encouraged to see very broad-based growth across our key markets and our product verticals. New contract momentum continues strongly with nine agreements signed, and we're seeing strong momentum in Q2. And as I said, our sales pipeline is looking very good for the remaining second half of the year. We completed four new partner launches in Q1, which obviously underpins revenue for the rest of the year, and we've got good visibility on our Q2 launches, which again is where a lot of the revenue bridge and growth is going to come from this year. And as I already mentioned, we've started the project to decommission our legacy platform, Alira, which is going to remove a lot of duplication and streamline processes. And that's going to give us access to one and a half to two million of cost savings in 2026 and onwards. And we believe a material upside to that in terms of revenue. And given the performance of our underlying customers, we remain on track to meet our 2025 revenue guidance of at least 44 million and EBITDA of at least 10 million. And we remain very positive about our future growth prospects. And finally, I would just like to thank all of the gig employees who've gone above and beyond over the last four and a half months. So thank you for listening. And with that, Phil and myself are happy to take any questions.

All right, thank you very much for the presentation. I'm going to start a bit with the questions on the guidance which you reiterate and you give some color on how the near-term future will look as well. Just wondering a bit on the kind of low end on Q2 revenue guidance is basically flat from Q1, but still you have six launches coming. So what's the kind of dynamic that you mean you could end up in the lower end of range there coming up?

We obviously have some moving parts in terms of some chunky setup fees and things like that that were sort of in Q1, Q2, so that's the sort of delta. And obviously, when we launch clients, we take a relatively conservative view, so in the first sort of four to six weeks, we're not really assuming any revenue. So obviously if they suddenly are much stronger than we expect, then we'll be at the upper end of the guidance. And then obviously the other sort of flex is just the setup fees. And they are quite chunky, so it's quite difficult to predict. So that's the real delta.

All right, understood. And do you see any, I guess now this year, it's very much about new launches, but do you see any kind of seasonality impact as well? I guess Q4 is typical, the strongest quarter for online casino, but anything that impacts as well?

No, I mean, to be honest, our underlying clients are performing very, very strongly. So there's clearly a little bit of seasonality, and obviously February's got a few lesser days. But that's a rounding error, really. But no, overall, we're pleased with the underlying performance of our key customers. And yeah, there is a slight little bit of seasonality, but nothing really that jumps out. Yeah, yeah.

And historically, you have seen some customer exits impacting your reported revenue and online growing. Is that completely finished now or is there some impact? I don't think it's ever completely finished.

I think obviously, you know, there's still a tail within GIG, which over time In terms of coming on our journey, the sort of clients that we're looking at, I just think it's inevitable that there'll be some churn at the bottom end. And if you look at any B2B business, there's always reasons why clients are either going to be taken over or whatever. So I'm not going to say it's the end, but I think given our pipeline and given the growth of the top end coming through and our existing customers, then I think the impact going forward from client exits should be minimal.

Right. And looking at profitability, you are guiding for quite a substantial jump in EBITDA margin for Q2. Is that mainly driven by lower marketing costs or anything else coming in there?

It's a little bit, but I mean, as I think Phil demonstrated, I think what's really important to stress and what you can see in our Q1 results is just the scalability and operational gearing in our business. You can see that our EBITDA are expanded by over a million. which is effectively the revenue just dropping through to the bottom line. So as we go forward this year, we expect a significant high proportion. The flow-through ratio is going to be probably in the 90% of that incremental revenue dropping down to the bottom line, so it'll drop straight through. And I think that's just... That's one of the great advantages of this SaaS business model. Obviously, Phil and the guys, again, were obsessively focused on cost optimization and will continue to be so. That obviously enables the business to have this very significant operational gearing.

That's kind of a follow-up question that, I mean, you say you see further cost savings during the remainder of the year. Is that, I mean, kind of in absolute terms that you see staff costs coming down, hope is coming down, or is it more like... It's everything.

You know, we're continuing to focus on, we've obviously, you know, we've invested in a lot of key people. But I think as we remove, you know, I talk about duplication processes that we're constantly looking to evolve. They'll obviously, as we grow the business, there's certain costs that will expand, you know, hosting costs and things like that. But I think there's still a big opportunity for us to continue to streamline and optimize. So I think that's where, you know, what the focus is, and that's why we'll sort of see the growth going forward coming through in terms of that EBITDA margin expansion.

And looking at the top-line development and the Q1, you had the launch of Premier Road, the first sweepstake casino. What's your take there? How did that perform compared to expectations?

Again, it's still very, very early days. It's only just launched, so it's very difficult to say too much in the first two or three months. But they are now starting to push the button and we are starting to see an improving performance. So we're very excited about them and also the other clients that we're launching very shortly. And that obviously is why we're still very confident in terms of our revenue guidance and growth in Q3 and Q4.

Yeah, and I guess now you have a kind of reference customer up and running. Is that an important part to gain more customers in Sweeps Tech Casino?

To be honest, I think we've got enough customers. The key now is launching them. As I mentioned, we've got three important imminent launches over the next few weeks, and then we'll have a few more at the back end of Q2, and then we'll have constant launches as we go through Q3. That's the key driver for us, and a decent proportion of them are going to be in sweepstakes.

And regarding the launch, here you have four Q1, I think you said six in Q2. Nine in Q3 and nine in Q4. Yeah, so it's basically kind of a gradual ramp up and then pretty even in Q3, Q4. And if you look at those that you're launching, do you see any difference in terms of size, risk, potential compared to what you've launched this far?

Yeah, well, I mean, as you can see from the guidance, you know, the underlying, obviously, read through is that these clients are much bigger than the recent launches. So, yeah, we're extremely excited. We've worked very hard over the last six months to get to a position to launch these clients. And these are a different scale and size of client that we've launched historically. So, you know, we're very optimistic and very excited about these launches that are coming up.

And you also gave us an update on your contracted pipeline here, which grew from 16 to 20 million. You previously had this kind of potential pipeline as well. Is that continuing to grow? Yeah, it is.

But I mean, I think it's the most important thing is actually what we're contracting and that's the key growth driver. And I think we're quite open with the amount of information we give, so we've just got to be a bit careful with not flooding too much information. So we've focused on some key KPIs, and I think for us, the key KPI is how much business we can sign and contract, because that's obviously going to drive the future revenue. And obviously, we're now at 20 million of future revenue of our business, so it gives, hopefully, investors and people like yourselves a good idea of what the revenue opportunity is.

And in addition to new launches, you're talking about the Sportsbook upselling as well. And if a Sportsbook upgrade is coming, is that an important part to get more revenue from that product?

Yes, 100%. I think it's an absolutely huge opportunity for Gigg. I said before, we're not quite there yet in terms of being at the very top in terms of that product offering, but we're not far away. It's an extremely good product, but it's not where we want to be as a company. We want to be at the top. We want to be the winners. So we've been really focused on improving a few of the key areas that will start to be deployed in Q3. And obviously ahead of that, we're very optimistic of signing meaningful new customers, which will have a big impact on our sports business as we go into 2026 and beyond. And that's a key strategic focus.

And coming back to a question maybe more on cost savings, but also potential upside in sales. You mentioned the platform consolidation or the Spanish platform migration. Do you see any risk when you move these clients? Are they, I mean, positive to moving over to a new product? No, I think, look.

Alira is like a 15-year-old platform, okay? So, and obviously there's always, you've always got a bit of a pushback when anyone's moving from their existing platform. But as I highlighted, the advantages of moving on to our CoreX next generation platform far outweigh the risks. You know, having the ability to have access to our AI, gig data and logic tools is a real game changer. The front end tools that we have is a real game changer. We have no doubt that that will allow the Casino Gran Madrid and these big customers to significantly be more competitive and drive a big increase in their revenue. There was obviously, when we were planning this, we obviously had to talk to all of our customers and get them across the line, but I'm very pleased with the team and also the relationships we have with these clients. that they all see the big opportunity, and so now it's a case of us all just making sure that we deliver on that, and we've got a good plan in place. We're working very, very hard, and as I said, our first customers will start to migrate later on this year, and we plan to have at least four done by the end of this year, and then the remainder in the first half of next year.

All right. And maybe a question for failure as well. I mean, you continue to make progress on cash flow as well. And you ended Q2 with a pretty good cash position. The only thing I saw that CapEx was up slightly, maybe quarter to quarter. Where do you see that developing from here?

So CapEx will probably remain pretty flat across the year, but with the revenue increases, it's something where I'm still seeing that inflection point, Q3 to Q4, where we start being cash generative. The positive thing is that we've got 4.9 million. We had an additional income from Gen 2 plus the 2 million RCF. So for me, that balance sheet very much supports the growth trajectory that we're looking at. So we're exactly where we thought we'd be at this point in time. So it's just about executing on the rest of the plan for 2025 and that will then bring the cash generation in towards the back end of the year.

And let's say if new launches are delayed and then revenue doesn't grow as expected, do you have any measures to improve cash flow or do you feel that you can rely on the liquidity if you have as well?

I mean, in that case, as I say, we've got the backup with the RCF, you know, it's always something that I'm looking at on a, you know, basically daily basis to make sure that this isn't one, you know, strategizing and putting forward scenarios. If we do delay here, where can we make that up elsewhere? You know, there's, I think there's enough levers within the business that that's not going to be an issue, but certainly something I'm monitoring on a daily basis.

But we do have some variable costs like marketing and those type of things that, you know, if we had to, we could pull pretty quickly. So there are pockets of cost savings that we could target pretty quickly, if that was the case.

And then looking a bit on maybe the regulatory environment, new markets, I mean, there's lots of discussion in Brazil regulating, is that the market where you see potential now?

Yeah, no, it's something that we are looking at. We weren't there before. So it's virgin territory for us. But obviously, we've got a lot on our plate at the moment. And I don't want to distract anybody from being razor focused on delivering what we need to deliver. But it's certainly on my radar. It's certainly something that I'm looking at. Don't be surprised that in the next few months that we do announce something in terms of what our strategy is going to be in Brazil. So I think there's a big opportunity. There's a lot of legacy providers that were there before the market is now regulated. I think given what we provide from a reporting perspective, regulatory perspective, I think we can offer a lot of value in the Brazilian market. So I think it's going to be a big opportunity for us in 2026 and beyond, yes.

And in terms of a regulatory environment, I mean, one thing, at least for the listed companies, that was a big news this quarter, say, Evolution, which did this kind of ring fencing of their games in the regulatory market. Is that something that you see happening as well, that regulators, I mean, if you have markets where you have kind of green market and clean markets?

Yeah, but it doesn't really apply to a platform business. It's very difficult to basically double dip or do both. So I think it's more on the casino side.

Interesting. And any changes? I mean, you mentioned your competitive environment there. Do you see any changes there or any of your competitors doing more like you or anything that's worth managing there?

I think it's a very competitive marketplace. We respect our competitors, and it always has been. But we continue to focus on improving our technology. We believe that we're ahead of the game in terms of AI and the AI tools we have, so we try and differentiate ourselves. by having this sort of full turnkey solution. So we're very strong in sports platforms, social casino, we have the AI tools, we provide managed services. So but being that sort of one stop shop, and having that sort of breadth of coverage, we think allows us to sort of differentiate ourselves and segment ourselves from some of the other providers where maybe they're slightly stronger in a certain area, but taking it all together. I think that's where we we have real value for customers.

We'll see if there's something coming from the audience as well. And yeah, one may be interesting here. I mean, you're saying new customers is adding a lot to the growth, but how is your managing existing clients and the growth of existing clients?

Yeah, I mean, the growth from existing clients is very solid. We're very happy with the growth of our clients. So, you know, it's probably just under, probably between 5% and 8%. So, you know, we're pretty happy with that.

All right.

with some obviously double digits, some lower down, depending on their marketing, what they're doing, where they're investing. And obviously when you've got a big portfolio, you'll have some markets that are a bit of a struggle, some are doing a bit better. So margin on sports, obviously we've got a lot of Canadian clients where it was a good few months. Elsewhere, France, it wasn't. So it's sort of just in swings and roundabouts. But overall, yeah, we're happy with that.

And also one question on reporting, if I understand it correctly to you, Phil, maybe do you want to report it in two EBITDAs? I guess one is EBITDA less capex and one EBITDA just to show how EBIT less capex is developing.

Yes, I mean, look, it's something definitely consider how the best information for investors, shareholders and the community and the best way to do it, I think. for us the main focus in in this quarter was to strip out all these adjustments we've been making last year and report a really clean ebitda you know last year we had a lot of ins and outs our adjusted ebitda you know we had a lot of one-off events and for me to provide clear information is to strip out as little as possible and literally just adjust for share based payments and that's it and make that Therefore, a very clear number. But I'll definitely have a think about that and see whether there's any other information and how to present it, whether that's more helpful. So one to follow up on, I think.

And also, can you technically follow up on that on depreciation and amortization level? I think it dipped a little bit this quarter. Do you see it stable from here or anything that could change that?

No, I mean, that's pretty flat. It's pretty constant. You know, with our cost base not growing, we've got a pretty constant CapEx rate as well. So the DNA comes through exactly how we'd expect. So I'm not expecting that really to move quarter and quarter. That should be relatively flat throughout the year.

And maybe a final one, I forgot to go through the kind of launches you see this year. I mean, the new launch is going to be the major growth driver. You also mentioned sweepstake casinos. Is that also the big part of the new launches? If you can add anything on that or is it a mix of regular and sweepstakes?

No, it's actually quite a nice mix. It's, as I said, it's a combination of existing clients going into new markets. There's definitely a good proportion of sweepstakes. And then, as I said, we're launching into the Philippines, which is a very exciting and big market. We've announced that deal last year. And we've got a Swiss launch, and then we've got other launches coming through in Q3. So it's a pretty nice mix, actually. It's definitely not just sweepstakes-orientated. No, no, it's pretty much broader than that.

All right, thank you very much. Thank you.