GiG Software PLC

Good morning, everybody, and thank you for joining us. I'm Richard Carter, the CEO of Gig Software, and I'm joined today by our CFO, Phil Richards. Together, we'll take you through our second quarter 2026 results, covering the financial performance of the quarter, our cost discipline program, and the proposed upcoming acquisition of A2C Africa, which we believe marks a real turning point for this business. Just briefly on the running order, I'll start with the key highlights from the quarter and Phil will then take you through the financial review in detail. I'll then come back to close out with our strategic progress and outlook, including a deeper look at the 888 Africa transaction, the African market opportunity. With that, let's move to our key highlights. First and most significantly, we've agreed to acquire an 80% stake in 888Africa for 16.4 million euros. 888Africa is an increasingly profitable, cash generative, leading B2C operator in the African market. We believe this transaction has multiple positive connotations for GIG's near-term and also longer-term profit and cash flow metrics, as well as strategically positioning GIG towards one of the most attractive iGaming markets with unparalleled long-term growth opportunities. Now let's look at Q2. On an underlying basis, we delivered 8.8 million of revenue and 0.8 million of adjusted EBITDA for the quarter. And Phil will unpack the details behind these numbers shortly. We continue to build commercial momentum, signing seven commercial agreements in the quarter, four contract renewals, and three new operators for the newly regulated Alberta market. We also delivered nine successful brand launches in the quarter. That takes us to 13 for the year to date, which is already ahead of the pace against our four-year guidance range of 12 to 14. On the platform side, we achieved CoreX certification for the Spanish market, which will allow us to migrate customers off our legacy Alira platform and unlock further savings and efficiencies. And finally, on cost discipline, we've now implemented more than €10 million of annualized cost savings, with the impact flowing through from Q2 2026 onwards. I'll now hand over to Phil, who will take you through the numbers in detail.

Phil. Thanks, Richard. Good morning, everyone. I'm going to walk you through the financial performance for the quarter and for the first half, starting with the headline summary, then the revenue bridge, our cost discipline program, EBITDA development, and finally the cash flow position. So starting with the headline numbers, revenue for the quarter was 8.8 million euros against 9.3 million in Q2 2025. Adjusted EBITDA was 0.8 million compared to the 1 million a year ago at a 9% margin versus 11% last year. I want to be upfront about what's driving that year-on-year movement because it's important context. This was a solid quarter with no one-off revenue items, but our reported revenue was impacted by the insolvency of a significant customer, Richmond Atlantic, and that had a meaningful effect both on our top and, as I'll come to, our bad debt provisions for this quarter. Excluding that impact and lower setup fees, our underlying revenue growth was actually 14% up year-on-year, so the underlying trajectory of the recurring business remains positive. We also launched nine new brands in the quarter and our cost base decreased year on year, which I'll expand on over the next few slides. Looking at the chart on the right, you can see the quarterly progression of revenue and adjusted EBITDA from Q2 2025 through to Q2 2026. This slide bridges Q2 2025 revenue to Q2 2026 revenue, so you can see exactly what's moving. Customer growth added 1 million. That's the underlying business doing what it should do. Working the other way, a change in setup fees took 0.7 million out and other non-recurring items took a further 0.8 million out, bringing us to 8.8 million of revenue in Q2 2026. On the right-hand side, three sporting metrics. Total revenue on a trading 12-month basis to Q2 2026 was up 7% versus the prior trading 12 months. Underlying recurring revenue growth year-on-year was up 14%. And sportsbook revenue was up 6% year-on-year. So even though the reported quarterly number is down, the underlying growth engines of the business, recurring revenue and sportsbook, are both moving in the right direction. Turning now to costs. Our total operating expenditure for 12 months to Q2 2026 fell to 31.4 million, down from 32.5 million in the 12 months to Q2 2025, a 3% reduction, with personnel and marketing delivering the bulk of that saving. If we break that down, marketing costs came down 0.2 million, a 14% reduction. Personnel costs came down 0.9 million, a 4% reduction, and the largest absolute saving reflecting completed restructuring. Other admin costs were broadly flat. The headline figures on the right summarise this. Minus 3% on total operating expenditure, trailing 12 months. Minus 4% on personnel costs, which is the largest absolute saving at 0.9 million for trailing 12 months, reflecting, as I said before, the completed restructuring. Looking at this on a gross cash basis now, excluding salaries that are capitalised. gross operating expenses decreased 6% year-on-year by 1.2 million from Q4 2025. You can see the quarterly trend on the chart. 11.1 million in Q2 2025, rising to a peak of 11.7 million in Q3 2025, and 11.6 million in Q4, 11.3 million in Q1 26, and we're now at 10.4 million in Q2 26. That's an 11% reduction from Q3 2025 peak. There are two things driving this. Firstly, we've reduced our FTE base by over 25% since the 1st of January, streamlining our operations whilst using AI and operation efficiencies to mitigate any impact on delivery. Secondly, we're removing unprofitable operations entirely, exiting the US, the Philippines and our white label business, which lets us focus on our core customers whilst cutting significant costs from the business. This bridge shows how we got from 1 million of adjusted EBITDA in Q2 2025 to 0.8 million in Q2 2026. A modest decline with a lot of positive detail underneath it. Revenue effects took the number down, and COGS had a small negative impact too. But you can see that people cost at about 0.9 million. That's the year-on-year reduction in people costs, excluding capitalized amounts, flowing through positively. Marketing was broadly neutral. Other admin costs took a bit off. Net-net, we landed at 0.8 million of adjusted EBITDA for Q2 26. It's worth being clear on the adjustments here. This is EBITDA excluding share based compensation, bad debt provisions and excretion payments of 0.1 million, 3 million and 0.1 million respectively this year against 0.1 million and 0.1 million in the comparative period. A significant part of the £3 million of bad debt provisions relates to Richmond Atlantic Consultancy, as I mentioned earlier, and it's the reason our statutory EBITDA and EBIT numbers look materially different to the adjusted figures. The key message here is our annualised cost savings of more than £10 million are now enacted from the end of Q2, so the full benefit of that work is still to come through in the second half of 2026. Finally on my section, cash flow. We continue to focus on reducing cash outflow, and I'm pleased to report a 0.5 million quarter-on-quarter improvement in operational cash flow. If we walk through the waterfall, we started the quarter at 5.4 million of cash at 31st of March. The loss from operations took 7 million out. Depreciation and amortization added back 5.1 million. Change in working capital added 2.4 million, and CapEx on PPE and development took 3 million out. If we add 5 million, and adding financing activities added 0.5 million. This brings us to the closing cash position of 3.5 million. Looking ahead, we expect additional cash flow in the second half as the cash generative 888 acquisition contributes and we've strengthened our cash position with additional funding secured for that transaction. Now that's it from me on the numbers and I'll now hand you back to Richard to take you through our strategic progress and the 888 Africa opportunity in more detail.

So thank you, Phil. So I want to now spend the rest of our time today on two things. Firstly, the strategic reset we've been driving through the business this year. And secondly, the 888 Africa acquisition, which I think fundamentally changes the growth profile of GIG. Our strategy during Q2 has been built around four pillars. First, concentrating our investment and commercial attention on key customers who are already growing well on our platform. Second, exiting unprofitable business and winding down business lines that don't meet clear and acceptable returns, which then frees up both resources and capital. Third, withdraw from unprofitable markets. We are exiting markets that don't offer a credible path to profitability, specifically the US, the Philippines, and our white label businesses. And fourth, right-sizing our headcount and operating costs to match a leaner, more focused business. At the beginning of the year, we announced an annualized cost saving program of 4.5 million euros. That program has now been delivered. In June, we enacted an additional cost reduction program targeting a further 6 million euros in annualized savings. The impact of this second program will begin to flow through the P&L from July onwards, with the full impact realized from October. This provides a meaningful offset to the revenue reduction in the final quarter and positions the group well into next year. The cost reductions we have enacted are largely due to the strategic closure of our white label business, specifically with SkyCity. While this move carries no revenue impact for the current year, it will result in significant resource reductions. Additionally, we are exiting both the Philippines and US markets, and as part of our strategy to focus on key profitable markets from Q3 onwards. As a result of these combined actions, we expect the impact of lower revenues on EBITDA to be substantially mitigated. The group on a standalone basis, excluding A2A Africa, also remains on track to be cash generative by the end of the financial year, which is testament to the speed and discipline of our response. Now looking further ahead, the planned closure of the Spanish Alera platform during 2027 will deliver further annualized cost savings of €1 million. In addition to the cost benefits, the migration away from Alera represents an opportunity to consolidate our technology offering and create incremental revenue upside as customers transition to our next generation platform. and the impact of these developments can be clearly seen in the chart on this slide which depicts an indicative trend analysis from Q1 through to Q4 2026. It shows stable revenue and cash opex declining sharply from around 12.5 million in Q1 to converge with revenue by Q4 and most importantly underlying cash flow moving to break even by Q4 2026. This is the clearest illustration of why we believe we're on track to be cash generative by the end of the financial year. Now, let's turn to our proposed acquisition of 888Africa and why we believe this is such a compelling opportunity for GIG. So firstly, let's address why Africa? Well, quite simply, Africa's online gaming sector offers unparalleled long-term growth opportunities driven by demographic, mobile and regulatory tailwinds that few other regions can match. So in terms of demographics, Africa has the youngest population in the world, with growth running at more than double the global average. Africa is a mobile-first market where connectivity is accelerating fast, with substantial upside still ahead, given the continent is only at 28% mobile connectivity today. This compares to 95% to 97% for the UK and North America, so providing a big runway for growth. Regulatory-wise, the landscape is fast maturing, with markets shifting from an informal play towards long-term, compliant license frameworks, which we believe will help skew the market's success further towards compliant operators such as 8 State Africa. Additionally, mobile money adoption is running above 70% and provides access to millions of new players across the continent. So given these powerful structural tailwinds, it's no surprise that the African region represents one of the most attractive growth opportunities in global iGaming, with the market expected to rise from $11.6 billion today to $22 billion by 2030. And this is exactly why we've moved to secure a position in this market. Let me now talk specifically about the rationale for the proposed 888 African transaction and what it brings to GIG. So firstly, it gives us a geographical revenue and profit diversification, as well as entry into one of the fastest growing iGaming regions globally. Two, we get immediate top line scale, adding over $50 million of annualized revenue to the combined group from completion. Three, it helps strengthen our product leadership and bolster our capability across the enlarged group. And fourthly, we've agreed to phase consideration over 10 months, funded both our convertible debt facility and equity issuance. And then lastly, the combined group is immediately expected to be cash flow positive on a quarterly basis with a strengthened balance sheet. Now, looking at the recent 888Africa quarterly financial performance. Total revenue has grown 32% from $11.3 million in Q4 2025 to $14.8 million in Q2 2026. Gross profit has grown 77% from USD $3.5 million to $6.2 million over the same period. While adjusted EBITDA has grown from a $2.2 million loss to a $1.9 million profit. And EBIT, which equates to cash, has moved from a $3.2 million loss to a $1.1 million profit. This is a business that we believe is now well positioned to build on those recent positive progress and we're really looking forward to helping contribute to future growth. We especially see some upside from both the gross margin line as well as from the OPEX lines of the P&L and we'll update in more detail on this at our Q3 results in late October. So now turning to the 2026 guidance. Following the expected completion of the proposed 888 Africa acquisition by the end of September, we now expect the combined group revenue of between 44 million and 48 million euros and adjusted EBITDA between 5 million and 7 million euros. The remainder of the year will be characterized by continued cost discipline, integration of the 888 Africa and delivery against our committed launch schedule. So in summary, this has been a quarter of genuine operational progress. Alongside delivering more than 10 million euros of annualized cost savings, with the impact now flowing through from Q2 onwards, we've achieved 13 brand launches year-to-date, already ahead of our four-year guidance, and we remain firmly focused on underlying cash flow generation. Looking forward, the proposed A2A Africa acquisition will significantly accelerate our revenue, EBITDA and cash flow growth. And post integration, we expect the combined group of GIG and A2A Africa to be cash flow positive on a quarterly basis. We are, in short, a sharper, fitter and more focused business. And we have ongoing confidence in GIG's future growth prospects. So thank you for listening. And Phil and I are now happy to take any questions you have.

That's great, Richard. Phil, thank you very much indeed for updating. Investors, ladies and gentlemen, please do continue to submit your questions just using the Q&A tab situated on the right-hand corner screen. So while the guys take a few moments to review the questions submitted already, I'd just like to remind you, recording this presentation along with the copy of the slides and the published Q&A will be available via your InvestorMeet company dashboard. Phil, Richard, you've had a number of questions from investors today. Jeremy, perhaps if I may just hand over to you to moderate us through the Q&A, and then I'll pick up from you at the end.

Thank you, Mark. We've had a number already submitted, so I think we should dive straight in. There's two initial questions for Phil here. First one, revenue is down 5% year-on-year in Q2 and 3% in H1. How concerned should investors be about underlying trajectory of the business? And a follow-up, why did adjusted EBITDA fall to 0.8 million euros from 1 million euros and why did margin compress from 11% to 9%?

So I think we touched on this in the presentation, but for me, what we really need to look at is the underlying growth from non-recurring revenue. It's up 14% year on year. The sports book is growing nicely. So from my perspective, business has never been in better health. So while the top nine number for sure has come down a little bit. I'm looking at the quality of the revenue coming through and that growth trajectory. We've had some headwinds. We talked about Richmond Atlantic, for example, but we've done everything we can to mitigate the impact of this. And you can see that mitigation with the second part of your question in terms of how the EBITs move. So EBITDA hasn't moved by much despite the revenue decline because of the cost impact that we've had and the cost savings we've introduced, which we'll see further in Q3 and Q4. So for me, the underlying business is extremely healthy and moving in the right direction. You know, the cash outflows are reducing, our costs are reducing, underlying revenue is growing. So whilst, you know, the top headline numbers might look like there's a little decline, for me, it's the healthy part of the business that's growing that's important and the ability that we have had to mitigate the impact of any headwinds through looking at our cost base as well. So I see this as a really positive development.

Thank you. Richard, just one on liquidity before we dive into a few on the proposed acquisition. Cash fell from 9.9 million euros in the full year 25 to 3.5 million euros at the half year. Is liquidity a concern?

So I think I'd address that by pointing to what we spoke about in the presentation. So firstly, the underlying gig business now is moving towards generating positive cash. We propose the acquisition of A2C Africa, which will add significantly to obviously our revenue EBITDA, but I think most importantly to generating cash flow immediately. And also today we've announced that we've raised 8.5 million euros. And of that, 2.5 million will support working capital on the balance sheet. So I think the combination of now the business not losing cash and then going to generate cash, adding it to Africa, which is very cash generated business, and then some of the working capital from today's convertible and equity raise, I think puts the balance sheet in a very, very strong robust position. So no concerns there.

Okay, so I think let's dive into the acquisition now. I've got quite a few questions. Let's take two initially. Why Asia Africa and why now? And how financially healthy is that business? And can you substantiate the growth claims that you've talked through today?

So why Africa, why now? I think I personally have been looking at Africa for six or seven years, so it's anyone that's in the online gaming industry has always had an eye on Africa given the growth rates. um but it's not an it's not an easy continent to get into for many reasons you know regulatory wise product wise operational wise um so we've been looking at this or i've personally been looking at this for a long time gig had been looking at this for for the last sort of 12 months um to enter the market on a purely uh b2b front um And it's just timing. This opportunity came along. We studied it. We thought, actually, this is for us. We want to enter this geography. And this is, we think, an attractive business to buy. It gives us the knowledge, gives us the entry into the market. It's obviously highly profitable, highly cash generative. So it ticks all the boxes. And we get real local expertise, which will then, we believe, will help shape Our product roadmap, our technology, and then we will then probably within 12 months look to launch a B2B business in Africa, which will be obviously incremental to the current sort of gig numbers. You know, I think that's really the main reasons. It's a very attractive market. We're buying a business that we think has a great sort of runway ahead of growth. It's currently very cash generative, so it ticks all the boxes for us.

Okay, and just a quick follow-up on that. Can you give everyone on the call a little brief summary of the markets that Asia Africa operate in? and what's its competitive position in each of those markets?

So today, ATA Africa operates in three markets. Mozambique, where it's market leader. Angola, where it's just in the process of growing its business. And then Tanzania, again, just in the early stages of growing its business. So it's mainly Mozambique, but with significant growth opportunities. Angola, which is a very attractive market. And Tanzania, which is also a very, very attractive growth market.

Okay, two more on that then. Are Evoke due any further contingent payments for future performance over and above the deferred payments you've outlined this morning? And are you obliged to use the 888 brand in Africa?

So, no is the answer to the first question. And are we obliged to use the 888 brand? No is the answer to the second question.

Fine. And then just moving back to the core business, why exit the US and the Philippines and the white label business specifically?

I think the key for us is we have to get Gig to generating cash and being breakeven. So given the issue we had with Richmond Atlantic, we re-looked at the P&L and we have decided to remove all businesses that don't really give us the right return on investment and also are loss making. There were those opportunities. It gives us access to unlocking significant cost savings. So we thought that that's the right decision. You know, the focus is we need a cash generative underlying gig business. What's the quickest way of getting there? We need to remove, obviously, you know, loss making parts of our business. And so it was a pretty simple decision.

Okay, and now one for Phil, can't leave you out. Can you talk us through the cost saving program and more specifically, how much, where and when does it land?

So the cost saving program that we talked about has really been in two parts. We talked about initial four and a half million in January. And then, you know, and that was what we explained earlier on was, you know, through utilization of AI optimizing. So it's, you know, some of the engineering parts of the business, some of the operational parts of the business is pretty broad, but mostly headcount related. The additional £6 million, we touched on it before, that's about exiting the markets, it's about removing the white label part of the business and the associated resources with that. Again, you'll see the majority of that will come from personnel costs like that naturally because that's our It's most significant cost base by far, but there are other costs associated with being in these markets. You know, there's licensing, there's lawyer fees, there's corporate fees, there's all the other incremental costs. And, you know, we're really leaving no stone unturned. So we're looking at all parts of the business to implement this program and it's staggered over the next quarter so a lot of what we've done has already been enacted in July August and another chance in September so that from Q4 you'll see all of this second tranche will have been enacted and that will flow through so it's staggering over the next few months so that you know it's basically by by the end of the year we'll have a very clean lean cost base But yeah, it's quite broadly across quite a few different categories.

And one for Richard. Is the business still investing in growth, or is it purely a cost-cutting story now?

No, I mean, no, we're significantly investing in growth. I mean, as we demonstrated this morning, we are continuing to launch clients. We've launched some very good clients in the UK, in Canada. We're investing significantly each month. Obviously, in our underlying OPEX, which is people. So no, we're still investing very significantly in future growth. We've got a lot of new onboardings coming in Q4 with some very big clients. And we've got a good runway into, obviously, 2027. And we've obviously got Gig Africa as well, or 888 Africa. So now I think the opposite, actually. I think what we've done is we've just moved to right-size the business costs versus revenue to start generating cash. But now we're still significantly investing in technology and product.

Okay, and a slight follow-up on that. What is the financial outlook for the core gig business, excluding Asia and Africa? And can you bridge from the implied Q4 revenue and EBITDA into 2027?

We'll come back in our October Q3 results and give a bit more colour on that, but I think effectively if you take what we've presented in the slide today, you know, eight and a half million of revenue for Q4, 2.2 million of EBITDA. If you just run that forward with a little bit of growth, I think you're looking at sort of 36, 37 million of revenue for underlying gig next year with, you know, on a baseline. And then you're looking at sort of eight to nine million of EBITDA. Again, we'd obviously assume quite significant growth on that, but that would be a starting point. and you know we expect the business to be cash generative sort of three to four million and then you know if you want to then take a conservative look at A2A to Africa you take what we presented today you run forward their Q2 numbers you know that will add what 50 million euros of revenue that will add call it another 8 or 9 million of EBITDA in 8 to 9 million euros of EBITDA and then the business is very cash flow generative so if you just take what we said here 1.1 million that's at least 4 million but obviously the business will be growing we think there's opportunities to with margin improvements at the gross margin level and at the OPEX level so you know for you know I think you know again combined roughly conservative around you know eight to nine million of cash next year so you know so what's that you're looking at 85 90 million revenue 18 million to 20 EBITDA and you know what eight to nine million cash so that's sort of where you know it'll be sort of roughly coming out I think

Excellent. Just looking at my pad, I think we've pretty much covered everything this morning that we can. Let me just throw it back to you for a brief summary.

Okay, well, thank you very much for joining us this morning. And we'll look forward to updating you at our Q3 results in late October on the future progress we make.

Good morning. That's great, Richard. Phil, thank you very much indeed for updating investors. If I could please ask investors not to close this session as we'll now automatically redirect you so you can provide your feedback in order that the company can better understand your views and expectations. On behalf of the management team of Gig Software, we'd like to thank you for attending today's presentation and wish you all a good rest.