Bragg Gaming Group Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 13, 2026

Key Takeaways

  • Negative Sentiment: Bragg withdrew its 2026 guidance after indicating standalone revenue was tracking below the prior range, citing weakness in Brazil, European regulatory changes, and softer activity at Wild Streak Gaming.
  • Positive Sentiment: Cost reductions helped keep adjusted EBITDA flat at €3.5 million despite a 12% year-over-year revenue decline to €22.9 million, expanding the adjusted EBITDA margin to 15.4% from 13.3%.
  • Positive Sentiment: Proprietary content revenue in the U.S. and Canada grew 44% year over year, supported by increased distribution and content volume; management said this is the company’s highest-margin product area.
  • Neutral Sentiment: Bragg completed its $9 million, all-share acquisition of Drayton International, adding advanced deposit wagering access, more than 100 proprietary game titles, stakes in five studios, and additional technology platforms. Integration remains at an early stage, leaving the timing and scale of potential synergies uncertain.
  • Positive Sentiment: The company expects its restructuring actions to generate approximately €10.5 million in annualized cash savings in total, with benefits expected to become more visible from the fourth quarter and into 2027.
AI Generated. May Contain Errors.
Earnings Conference Call
Bragg Gaming Group Q2 2026
00:00 / 00:00

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Operator

Hello, everyone. Thank you for joining us and welcome to Bragg Gaming Group's second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Robbie Bressler, CFO. Please go ahead.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Good morning, everyone, and thank you for joining us for Bragg Gaming Group's second quarter of 2026 earnings call. If you are connected to our online webcast today, you should see our second quarter earnings presentation on your screen, and you should have control to flip through the slides yourself as you listen to the call. If you are joining by telephone, please note that you can find our earnings presentation as well as the financial results press release on our website at investors.bragg.group. Please note that certain statements on this call may constitute forward-looking information or future-oriented financial information. A full explanation of these risk factors is available on the second slide of the second quarter 2026 earnings presentation titled "Forward-Looking Statements," as well as in the press release issued this morning and our public disclosures.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Bragg disclaims any obligation, except as required by law, to update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Any forward-looking statements made on this call speak only as of the date of this call. Bragg Gaming Group CEO Matevž Mazij and myself, the CFO of Bragg Gaming Group, Robbie Bressler, will discuss the company's second quarter performance and provide a business update. We will follow that with a question and answer session. I would now like to turn the call over to Mats.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Thank you, and good morning, everyone. Thank you for joining us for Bragg Gaming Group's second quarter 2026 earnings call. In the second quarter, we prioritized margin and cash flow performance over aggressive revenue expansion, which underpins our renewed group-wide strategy. Revenue was EUR 22.9 million, down 12% year-over-year. Adjusted EBITDA was held static at EUR 3.5 million and our adjusted EBITDA margin expanded to 15% from 13% in the same quarter last year. On July 9th, 2026, we announced a further reduction of approximately 19% of our global workforce, expected to deliver approximately EUR 6 million in incremental annualized cash savings and bringing total expected annualized savings to approximately EUR 10.5 million, together with the restructuring announced on January 8, 2026.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Combined with the acceleration of our AI-first transformation, it leaves a leaner organization concentrated on our core technology, content, and platform products, and it accelerates our path to cash profitability and adjusted EBITDA growth. Furthermore, I would like to highlight our content performance across North America, especially in Canada and the U.S. Our proprietary content being deployed by U.S. and Canadian operators is building very positive traction. This content revenue grew 44% compared to Q2 last year, driven by distribution, quantity, and quality of content. Proprietary content is our most profitable product, and the U.S. is the most important market for us. Seeing this level of growth is exciting, and it underlines the growth strength of the content we build. Against that, the Netherlands declined 14% year-over-year, reflecting the anticipated roll-off of legacy turnkey contracts following customer migration away from our PAM.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Brazil was static as certain operators moved to direct supply integrations, which moderated growth but improved the quality of the revenue we retained. Some other European markets were lower due to customer-specific factors and tightening local regulatory dynamics. Since quarter end, we have also closed the acquisition of Drayton International, and Matt Davey has joined us as non-executive chairman. I will come back to both of those after Robbie takes you through the financials. Robbie, over to you.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Thank you, Mats, and good morning, everyone. All of the numbers I refer to have been rounded, so they are approximate. Our reporting currency is EUR, and I will stay in EUR on this call. For the benefit of North American investors, we've provided a U.S. dollar equivalent conversion in our press release this morning. Second quarter revenue was EUR 22.9 million, a decrease of 12% from EUR 26.1 million in the second quarter of 2025. Gross profit was EUR 11.8 million against EUR 13.7 million in Q2 2025, with a gross margin of 51.7% compared to 52.7%. Adjusted EBITDA margin was EUR 3.5 million, static against EUR 3.5 million in the second quarter of 2025, with the adjusted EBITDA margin expanding 212 basis points to 15.4%. From 13.3% in the second quarter of 2025. We absorbed a EUR 3.2 million reduction in revenue and delivered the same absolute adjusted EBITDA.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

As Mats mentioned, we have completed several restructuring programs and are starting to see the results of these measures. In the second quarter, there was a 14% reduction in gross compensation costs prior to capitalization compared to Q2 2025. Sequentially, revenue came down from EUR 25.7 million in the first quarter of this year to EUR 22.9 million in the second quarter of this year. Adjusted EBITDA margin was held broadly flat over the same period at 15.4% against 15.7%. Holding margin through a sequential revenue decline is proving the cost reduction measures are doing their work. For the six months ended June 30th, 2026, revenue was EUR 48.5 million, down 6% from EUR 51.6 million in the first half of 2025. Adjusted EBITDA for the half year was EUR 7.5 million, flat against EUR 7.5 million in the same period last year. Moving to the balance sheet.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

As of June 30th, 2026, Bragg had cash of EUR 3.3 million. Three items since quarter end are relevant to our capital structure. First, we completed the acquisition of Drayton International on July 22 for $9 million, satisfied entirely in shares. Second, all 751,445 subscription receipts issued at $1.73 converted into common shares and warrants on closing, releasing approximately EUR 1.1 million to the company. I would like to note that our Chief Operating Officer, two of our Directors, Thomas Winter and Matt Davey, and myself subscribed in that private placement. Third, we renewed our revolving credit facility with Bank of Montreal for a further year on terms consistent with the existing arrangement. Turning to our outlook. As mentioned, we completed the acquisition of Drayton on July 22, 2026, and integration planning is underway.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

We previously disclosed fiscal 2026 revenue adjusted EBITDA and adjusted EBITDA margin guidance, which was prepared in respect of our company's operations on a standalone basis. With the integration of Drayton into our operations being at the planning stage, we do not have a reasonable basis on which to forecast the combined business for the remainder of the fiscal year. We are therefore withdrawing our previously disclosed 2026 guidance. Prior to the withdrawal, and on a standalone basis excluding Drayton, we were tracking below the low end of our revenue guidance range and at the low end of our adjusted EBITDA range. However, we were tracking to the upper end of the implied adjusted EBITDA margin range provided. Our focus is on integrating and optimizing the combined business, including aligning the product and technology roadmap, realizing identified efficiencies, and establishing the go-forward operation model and cost base.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

With that, I will pass it back to Mats.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Thank you, Robbie. A few commercial highlights from the quarter. We signed a definitive agreement with 711, a leading Dutch and Belgian operator, to power its new Belgian online sportsbook, integrating Kambi Sportsbook supported with our Fuze engagement toolset. We supported Super Technologies' entry into the regulated Greek market through its Superbet brand with RGS and hub aggregation. The successful launch of our content with Bet365 in the U.K. signals our effective penetration into key markets. Additionally, when Alberta opened its regulated market, we launched on day one alongside an outstanding selection of leading operators, making more than 80 of our titles available to players throughout the province. Our strategic direction is unchanged. Proprietary games first, AI-driven model, fewer low-margin aggregation volumes, and a move from being a supplier of components to being the architect of the ecosystem our operators run on.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Drayton advances that, and the point that matters most is reach. It takes us into advanced deposit wagering. Traditional iGaming is live in seven U.S. states. ADW is available in over 30. It also adds equity interests in five game development studios and three wholly-owned technology and distribution platforms. On timing, integration work is underway across content and technology, and it remains at an early stage. Before we go to questions, I would like to announce a change to our board. Don Robertson has resigned from the board effective today. I want to thank Don for his service and for his contribution to Bragg. Jordan Gnat will be joining the board in his place. Jordan brings over 30 years of expertise, serving as both an investor and an operator, over 20 of those in gaming and sports media. He's a co-founder and managing partner of Boardwalk Capital.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Before that, he founded and led Playmaker Capital, the digital sports media business he sold to Better Collective in 2024. He has also held senior roles at Fox Bet, The Stars Group, and Scientific Games. Jordan also participated in our recent private placement, so he's a shareholder as well as a director. His background strengthens the board, and we're glad to have him. Robbie and I are now available to take any questions.

Operator

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jordan Bender with Citizens. Your line is open, Jordan. Please go ahead.

Jordan Bender
Jordan Bender
Analyst at Citizens

Hey, everyone. Good morning and thank you for the question. Robbie, maybe to start with you, just on the guidance that was withdrawn. You mentioned revenue and EBITDA may be trending below where it previously was. Can you just talk about the old business, if we want to call it that? Where are you seeing some of that pressure? I guess we know Netherlands, there's previously going to be headwinds. I assume that was in the guidance. But just where are you seeing some of maybe the weakness outside of that? And then maybe the second part of it in acknowledging you're not providing guidance looking forward, but now that Drayton is part of the business, can you maybe just talk about more directionally how the growth, either revenue or EBITDA, of that business currently stands as we think about the two businesses now together? Thank you.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Sure. Thanks for the questions, Jordan. On the first question, just to clarify, we were trending to below the low end of the range for revenue, but we are trending within the range for EBITDA, but just at the low end of the range. What we are seeing is more pressure on revenue. With our cost-cutting measures, we have been able to keep our EBITDA margin within what we had thought the business would be performing at. In terms of what is driving the top-line pressure, we are seeing one thing to note in Brazil. When the market opened in Brazil, there were a lot of suppliers who were not set up to supply the market, and we were able to be utilized as a vehicle for them to supply their content into the market. This has softened.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

A lot of these suppliers are now set up in a manner where they can go direct to operators rather than going through us. This is relatively low-margin revenue, so it is not really having too much of a profound impact on our bottom line, but these headwinds are decreasing what we are seeing in terms of growth in Brazil. We have also seen some regulatory changes in different European jurisdictions, one being Croatia, which we have a good customer there, and we were foreseeing a good, strong year. It has performed. Year-over-year, we are seeing good growth, but these regulatory changes that came in have proven to be much more impactful than previously thought, and these regulatory changes had to do with the way customers are acquired and advertising restrictions. Those are two fairly sizable headwinds that are hitting us.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

We have also seen a little bit of decrease in what is put out in our Wild Streak Gaming studio. Historically, we have had a relationship where we have developed content on behalf of other providers or other studios who have done the distribution, and that has softened slightly. I point to those three things as being what has changed between us hitting within the guidance range and being slightly below that.

Jordan Bender
Jordan Bender
Analyst at Citizens

Okay. Any color on just directionally how Drayton International is growing?

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Yeah. We are really in early days to be putting any real color behind what we expect Drayton to do in the next six months and beyond. Integration work is happening now. We completed the acquisition in good pace, and we are really now focused on making sure that we can utilize the assets, integrate them as best we can, and have a very strong combined company. I am not going to provide specific details where we think we will be. A big reason why we made the decision to withdraw guidance, because we are not quite there in terms of being comfortable with what that forecast could look like. One aspect of Drayton, which I think is a huge positive, but it is going to take us some time to get clear on directionally which way we will go in the near term, is we have equity investments in five studios.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Each studio is in itself its own business with its own trajectory and its own outlook. We want to be very comfortable with each of those management teams, understand what is going to be at play in the next six months, but also make sure that we can utilize the assets we have at Bragg to enhance those results and really drive great group results. Look forward to talking about it on future calls, but not going to put out anything yet.

Jordan Bender
Jordan Bender
Analyst at Citizens

Great. I—

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

If I may just add, Jordan. Drayton obviously is an acquisition that is going to accelerate our growth through market access and margin expansion and tech efficiency. Through its ADW technology and partnerships, it is going to increase our addressable reach. Second, we added 100+ proprietary game titles and five studios, and that is in line with our strategies directly shifting our revenue mix towards higher margin in-house IP. Finally, obviously tech assets like their AI module fits seamlessly into our AI first framework or model, and it is reducing our unit cost of content creation and some other effects that that will have on our cost base.

Jordan Bender
Jordan Bender
Analyst at Citizens

Great. Thank you. Let me just follow up this whole conversation. Just kind of from the quote in the press release that says it will require a real change—

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Sorry, Jordan, I cannot hear you.

Jordan Bender
Jordan Bender
Analyst at Citizens

Think you talked about.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

I do not know if it is your line, but I cannot.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Jordan is breaking up.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Yeah. Why don't we go to the next and Jordan—

Jordan Bender
Jordan Bender
Analyst at Citizens

Can you hear me?

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Can rejoin the queue.

Operator

Your next question comes from the line of Jack Vander Aarde with Maxim Group. Your line is open, Jack. Please go ahead.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay, great. Good morning, guys. Congrats on the closing of the acquisition, and thanks for taking my questions. Robbie, just to follow up on some of the past comments and questions on the withdrawn revenue guidance, the prior revenue guidance. This excluded Drayton, but are there any new markets, maybe if I can, are there any new markets you entered or new catalysts that happened subsequent to providing that guidance that didn't maybe factor in? For example, you entered the Alberta market in mid-July. Any other developments maybe that weren't included or maybe they were factored in. Are these incremental to that prior withdrawn guidance, or is that something you don't want to comment on? Thanks.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

I will comment on Alberta was always in our plans. That was a launch and a strategic important milestone for us to hit. We didn't ascribe a lot of growth in that market as it's relatively new. We are quite excited what iGaming and iCasino especially is doing in North America across many jurisdictions. We did point out in our press release that our underlying U.S. business, so this is the proprietary content we service both U.S. and Ontario and now Alberta. That's growing at a very good tick. We are well over 40% growth from quarter to quarter, Q2 to Q2, 2026 to 2025. We are seeing growth in the areas we want to see and in the areas we have invested in. We are not necessarily jumping to new markets. We want to be very strategic in any territorial expansion.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

I wouldn't point to anything new that has come up. What interests us the most is what's happening in the iCasino market in the U.S. and Canada. It is just the continual growth of that market is extremely impressive. As a reminder, the projection on that market is EUR 97 billion. This is just the U.S. market at maturity. It's only 12% regulated right now in terms of the whole U.S. population. There's so much more upside. With the Drayton acquisition, we have really strengthened ourselves to be able to capitalize on that and quite excited about what can be achieved in that market.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay. I appreciate the color there. Maybe just a follow-up on, I guess the go forward gross margin and operating expenses on a quarterly basis and just how I interpret some of the language here. Obviously you are going to have incremental expenses, most likely from Drayton, but then you also made further, I think there was a July announcement where you made further restructuring, material restructuring, that was going to—

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Yep.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

I think it was cost cash savings of EUR 6 million or so, or I am sorry, EUR 10.5 million now altogether. I guess you have done a good job obviously in the first half of this year. OpEx is down pretty big from last year. Gross margin did tick down a little bit in the second quarter. I guess with all these puts and takes now, how does the back of this year kind of compare to the back half of last year on a gross margin and OpEx basis?

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Yeah, no, I appreciate the question. I am going to reserve comment just because we have withdrawn guidance, and we want to come back with a clear understanding of what our combined business can do. I do think, I mean, I can say directionally, I think the trends that we have seen are indicative of our current run rate of the legacy business. The gross margin for Q2 2026, you will see in our investor deck, there was a couple of one-off items that brought it down slightly. But if you factor those out, we are actually at about a 55.7% gross margin percentage, which is very much in line with where we have been and slightly better than prior quarters, which is showing the investment or the narrative that the more we move to proprietary content, the more we see our margins get better. So that is playing out.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

We had a couple of one-off items that brought that down a bit, but if you look at our investor deck, it is illustrated to see what that gross margin percentage is, which is really indicative of our current business in terms of run rate.

Jack Vander Aarde
Jack Vander Aarde
Analyst at Maxim Group

Okay, great. I appreciate all the color there, Robbie. I think that's it for me for now. I'll pass back into queue. Thanks.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Yep. Thank you.

Operator

Your next question comes from the line of Mike Hickey with StoneX. Your line is open, Mike. Please go ahead.

Mike Hickey
Analyst at StoneX

Awesome. Thank you. Hey, guys. Good morning. Just maybe a clarification. I'm not sure if I heard this or not. A little perplexed on at least not giving guidance on the core, Robbie, just given that you just missed the quarter on revenue. I'm not sure you clarified how you think revenue is going to trend on your core, but I think you would have visibility on that. Then when should we maybe talk about the complexities of Bragg and Drayton together that doesn't allow you the ability to give guidance on the new combined company?

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Sure. Thanks for the question, Mike. On your first question, just to clarify, we did provide comments of where we're trending on the standalone business, and those comments are looking for the rest of this year. So that's indicative of where we see we were trending on a standalone basis. We are giving color as to where the business is currently trending against our original guidance. And again, we're below our revenue range, but we're within the range from an EBITDA perspective. And actually, from an EBITDA margin perspective, we're trending to the upper end of the range, which was implied when we gave guidance. So hopefully that gives you some color as to where we are today from a legacy business point of view against our original guidance. In terms of the complexities, very good question, and I mentioned it a little bit when answering Jordan's call.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

But we effectively bought interests in five different studios, along with wholly owned infrastructure as well that Drayton holds. We need to get clear understandings from what we think we can do as a combined business as we work with each of those studios and combine our assets with theirs. We were able to move on Drayton at a fairly good pace, which was strategically important to us, but we want to be prudent with what we come back with in terms of expectations and felt like this is the best course of action at the time. We are excited and believe that there is quite good possibilities to see synergies a little bit on the cost side, but on the revenue side in putting these assets together. So we want to make sure we have a clear, reasonable understanding to put out expectations on.

Mike Hickey
Analyst at StoneX

On your annualized cost savings, the EUR 10.5 million, how much should we actually see here in 2026 versus 2027? What do you think needs to happen for Bragg Gaming Group to start to generate sustainable positive free cash flow?

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Yeah, we've done the work and we've taken out the cost. We're by no means done in terms of optimizing and seeing where more costs can come out. The savings are really going to start kicking in in Q4 onwards. This quarter, just to give some color, if you look at our gross compensation, so take out the one-time severance fees that we paid this quarter and disregard what's capitalized and what's not in terms of compensation. So if you look at our pure compensation number from this Q2 this year to Q2 last year, our compensation expenses are down 14%. So we are seeing the savings, and there's lots more to go. We got to get through these one-time severance payments, which we're going to have coming through the next couple of months. And then into Q4 and into 2027, the savings should really be showing through our numbers.

Mike Hickey
Analyst at StoneX

The last question from us, just thinking about milestones here in the next, call it, two or three quarters. What do you think sort of the biggest milestones that we should be looking at to sort of demonstrate that the restructuring and Drayton acquisition are starting to give you the benefits that you think they will, or basically that they're working?

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Very good question. Our focus 100% is on the integration of the Drayton assets, most importantly in the U.S., or I should say North American markets. That's where we're focused. That's where we see the value in Drayton coming together with our assets, and that's where we believe from a value point of view is most important for us to keep growing that business. As mentioned, we saw some good percentage growth, 44% Q2 to Q2, and even year-to-date and sequentially quarter-to-quarter, we're seeing double-digit growth. So that's our focus. Those are the milestones. That's the market that we want to keep conquering. I really think we've taken the right steps here with bringing Drayton in, us being able to align those two businesses to maximize value. That's the biggest milestone we're focused on.

Mike Hickey
Analyst at StoneX

That's great. Thank you, guys. Good luck.

Robbie Bressler
Robbie Bressler
CFO at Bragg Gaming Group

Thanks, Mike.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Matevž Mazij, CEO, for closing remarks.

Matevž Mazij
Matevž Mazij
CEO at Bragg Gaming Group

Thank you again, everyone, for joining our call today. We enter the second half of 2026 leaner, sharper, and with a clear games first focus. Thank you for your interest and your continued support.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.

Executives
    • Robbie Bressler
      Robbie Bressler
      CFO
    • Matevž Mazij
      Matevž Mazij
      CEO
Analysts
    • Jordan Bender
      Analyst at Citizens
    • Jack Vander Aarde
      Analyst at Maxim Group
    • Mike Hickey
      Analyst at StoneX
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