Online gaming software provider GAN reported a 213.6% year-on-year increase in revenue in the third quarter of its 2021 financial year, but its net loss widened to €7.9m.
Revenue for the three months to September 30 amounted to $32.3m, up by 213.6% from $10.3m in the corresponding period last year.
B2C operations were the main source of revenue for the provider, with revenue within this segment reaching $21.1m. GAN did not generate any B2C revenue in Q3 last year as its acquisition of Coolbet, its sole source of B2C income, did not close until January this year.
B2B revenue also increased from $10.3m to $11.2m, with platform and content fees being responsible for $8.7m of this total, and development services and other operations the remaining $2.4m.
However, while the addition of B2C operations helped increase revenue, this also led to a rise in costs. Overall operating expenses rocketed by 192.4% year-on-year to $38.6m.
Cost of revenue within the B2C segment was $7.2m and B2B revenue costs reached $2.4m, while GAN saw significant increases in spending related to sales and marketing, product and technology, general and administrative costs and depreciation and amortization.
While GAN did not report any interest expense in the quarter, higher operating spending led to a pre-tax loss of $6.4m, compared to $2.9m. However, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) improved from a loss of $434,000 to a positive figure of $39,000.
GAN paid $1.5m in tax during the quarter, leaving it with a net loss of $7.9m, much wider than the $2.9m loss posted last year.
However, despite this loss, chief executive Dermot Smurfit was upbeat about the provider’s performance in Q3, saying its financial results were in line with expectations.
“We added the iconic Treasure Island Hotel & Casino to our growing list of SIM clients during the quarter and continued to demonstrate the value of our ‘multi-state, one app’ capability as we launched Churchill Downs’ online sports betting operation in Arizona,” Smurfit said.
“We also built upon our existing relationship with FanDuel, helping to deliver their igaming platform in the state of Connecticut subsequent to quarter-end.
“Lastly, we continued to allocate our capital spending toward its most productive uses – ensuring it is deployed behind our people and technology – as we opened a new tech hub in Miami to leverage a rich and growing technology-oriented labor pool.”
Looking at year-to-date performance, revenue for the nine months to the end of September was 260.1% higher at $94.7m, with B2C revenue reaching $59.4m and B2B revenue $35.3m.
Operating costs were up 209.9% to $106.6m, but pre-tax loss only increased marginally from $11.2m to $11.9m.
After accounting for $3.2m in tax payments, GAN ended the nine-month period with a net loss of $15.1m, compared to $11.9m last year.
“We continue to make exciting progress in each of our business segments and initiatives and are well-positioned going forward,” Smurfit added.