Bragg Gaming Group Q4 2025 Earnings Call - Pivoting to Proprietary Content and Cost Cuts as Netherlands Headwinds Persist

Kelvin, Conference Operator: Good morning, ladies and gentlemen. Thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to Bragg Gaming Group’s fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Stephen Kilmer, Investor Relations. Please go ahead.

Stephen Kilmer, Investor Relations, Bragg Gaming Group: Good morning, everyone, and thank you for joining us for Bragg Gaming Group’s fourth quarter and full year 2025 earnings call. If you’re connected to our online webcast today, you should see our fourth quarter earnings presentation on your screen, and you should have control to flip the slides yourself as you listen to this call. If you have joined 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 risk factors is available on our second slide of our fourth quarter earnings presentation titled Forward-Looking Statements, as well as in the recently filed press release and other public disclosures.

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. On this call, CEO Matevž Mazij and CFO Robbie Bressler will discuss the company’s fourth quarter performance, followed by a question-and-answer session. I’d now like to turn the call over to Matevž.

Matevž Mazij, Chief Executive Officer, Bragg Gaming Group: Thank you, Stephen, and good morning, everyone. Thank you for joining us for Bragg Gaming Group’s fourth quarter and full year 2025 earnings call. We are Bragg, dual listed on the Nasdaq and Toronto Stock Exchange, and we are a specialist supplier of games and technology to the regulated iGaming market. We create and deliver cutting-edge online casino games, both from our own in-house studios and from top-tier in-demand partner studios. We empower online casino, sports betting, and lottery operators to launch, run, scale, and optimize their apps and websites. Through everything we do, we enhance the end-user experience by leveraging advanced analytics and AI to drive engagement and smarter, more efficient iGaming operations.

During the fourth quarter, we continued to see double-digit growth in our focus markets of the USA, where we saw 55% year-over-year revenue growth, and in Brazil, which saw revenue growth of 42.1% compared to the same period last year. This acceleration is testament to the success of our strategic focus on high-margin proprietary casino content. Overall revenue growth when factoring out the Netherlands, a jurisdiction which I’ll discuss further later in this call, was up 5.1% compared to the fourth quarter of the last year, demonstrating the continued demand for Bragg’s products and services in regulated iGaming markets around the world. During the quarter, we continued to expand our US content footprint through the launch of our exclusive and bespoke online casino content with Caesars Entertainment in West Virginia.

We also launched exclusive and aggregated content with several valued clients operating in Brazil and, in some cases, other key LatAm jurisdictions, including Brazino777, Blaze, and Super Technologies. We continue to be focused on optimizing our cost structure, which allows us to deliver operational leverage. As Robbie will now go into more detail, we’re pleased to be reporting revenue, gross profit, and adjusted EBITDA in line with our expectations for the fourth quarter of this year. I’ll be back to discuss some of these points in more detail after you’ve heard from our Chief Financial Officer, Robbie Bressler, who will now discuss the fourth quarter financials. Robbie?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Thank you, Matevž. In the fourth quarter of 2025, revenue was EUR 27.7 million, up 1.9% year-over-year. Excluding the Netherlands, revenue grew 5.1%, underscoring continued execution of our diversification strategy and the strength of our high-growth markets. As expected, the Netherlands remains impacted by regulatory changes, with revenue down 4.6% year-over-year. This region now represents a smaller share of total revenue as our business outside the Netherlands accelerates. Much of the underlying growth was led by North America and Brazil, which together accounted for 26% of total revenue, up 13% from a year ago. From a strategic point of view, the quarter reflects clear progress towards our goal of building high-margin, more diversified business.

We continue to shift our revenue mix towards proprietary content, which grew 20.8% year-over-year in Q4 and remains our best-performing margin contributor. This transition is a key driver of our expanding profitability profile. In Q4 2025, gross profit was essentially unchanged year-over-year to EUR 15.7 million with gross margin of 56.5%, reflecting sequential improvements versus 54.7% in Q3 2025. Q4 2025 adjusted EBITDA of EUR 4.6 million was also flat year-over-year compared to EUR 4.7 million in Q4 2024, but up sequentially from EUR 4.4 million in Q3 2025. EBITDA margin was 16.5% in Q4 2025. Moving to the balance sheet, we remain focused on maintaining a strong and flexible balance sheet.

As we noted on last quarter’s call, we successfully completed our new working capital revolving credit facility with a tier-one Canadian bank. This facility enhances our liquidity position and supports continued investment in high-growth, margin-accretive initiatives and significantly lowers our borrowing costs. Cash and cash equivalents as of December 31, 2025 amounted to EUR 6.7 million. Our strategy is delivering. We are becoming a more efficient, diversified, and higher-margin business, and we remain confident in our ability to deliver sustainable long-term growth and shareholder value. As we move through 2026, we remain very focused on continuing to optimize our product mix and optimize our internal processes and structures and believe there are significant opportunities to refine and improve our margins and cash flow.

In that regard, we announced some structural cost changes, including staff reductions in early January, designed to secure a resilient financial foundation for 2026 and beyond. As a result of the strategic restructuring, Bragg has reduced approximately 12% of our global workforce. We expect to incur restructuring costs related to this action of approximately EUR 1 million associated with personnel-related termination costs in the first quarter of 2026, and we anticipate annualized cash savings from the staff reductions and other restructuring efforts to be approximately EUR 4.5 million. Note that this amount does not include the expected positive impact of our recently announced initiatives to utilize AI to drive cost efficiencies and improve operational excellence.

After securing key hires in 2024 and 2025, we believe aggressive operational expense reduction and organizational realignment are the final steps to maintain our cash runway, drive EBITDA growth, and achieve cash profitability. Our strategic restructuring is designed to capitalize on our strong foundation and position us extremely well for organic growth and concurrent market consolidation opportunities. We also believe that Bragg is currently undervalued by the market and that improving our cash profitability will help address this issue while also making us stronger in meeting consolidation opportunities as they arise. Pulling everything together, we currently anticipate full year 2026 revenue between EUR 97 million and EUR 104.5 million and adjusted EBITDA of EUR 16 million and EUR 19 million, representing an adjusted EBITDA margin of 16%-18%. With that, I’ll pass the line back to Matevž Mazij.

Matevž Mazij, Chief Executive Officer, Bragg Gaming Group: Thank you, Robbie. We’ve been talking about the growing vertical of proprietary casino content at Bragg and how we have made it a strategic focus because it is a high-margin product which supports growing gross profit and EBITDA margins. Online casino content that we own also delivers compounding, recurring long-term revenues, and the U.S. market continues to grow. According to H2 Gambling Capital, the U.S. online casino market will grow from around $12.4 billion in 2025 to over $36 billion in 2030, a compound annual growth rate of 24% over the next five years. We have been building our portfolio of games for several years now, and approximately 60% of all proprietary content revenue in the fourth quarter of 2025 came from our games that we released before 2025.

In 2025 alone, we launched 44 new proprietary casino games. We’re demonstrating longevity, our strong player retention in industry terms, and we are delivering long-term recurring revenues from a growing mountain of fully-owned IP. We are also growing strongly in Brazil, where revenues were up 53.2% for the year, highlighting a successful regulated market entry in 2025 for Bragg. We are on target to see 12.2% of revenues coming from this very important jurisdiction now in 2026. Now, I want to briefly remind you why we’re talking about our revenue performance in terms of the Netherlands and non-Netherlands. We maintain our pride in being a market-leading iGaming supplier in the Netherlands, a consistently important market for Bragg.

Our dominant position has been stable for several years. Demonstrated by the significant share of regulated gross gaming revenue that flows through our products and technology in this jurisdiction. However, with increasing regulatory and tax headwinds facing our customers in the Netherlands, we’re especially interested and proud of the growth we’re seeing in regulated markets outside of that jurisdiction, such as United States and Brazil. Our 5.1% quarterly year-over-year growth in other markets shows what we can achieve when factoring out the unusual market conditions currently seen in the Netherlands. Our geographic diversification has consistently improved over the past 4 years, with non-Netherlands revenue rising from 51% of all revenues in 2022 to approximately 68% of all revenues in 2025. As our industry continues to grow and evolve, we expect to continue this trend of diversified growth.

Newly regulated jurisdictions, such as Finland, which has announced the launch of its regulated iGaming market in January 2027, offer great potential ahead of companies like Bragg. As we have previously communicated, we continue to expect one of our customers in the Netherlands, BetCity, to migrate off of the Bragg PAM in first half of 2026. As previously communicated, we expect the impact on the bottom line post-migration next year to be minimal due to the margin profile of that particular customer. Our PAM and full technology and content portfolio remain in strong demand in the Netherlands as well as in regulated jurisdictions around the world. We look in particular to those markets outside of the Netherlands to continue to drive our revenue and margin growth in 2026 and beyond.

As we have highlighted recently, we’re also looking to expand our business diversification beyond just geography. We achieved profitable growth with the percentage of revenue derived from our proprietary content increasing from 13.3% in fourth quarter of 2024 to 15.7% in the fourth quarter of 2025. This growth was primarily driven by our US content business. This shift is significant because proprietary content is a higher margin product, meaning that even with lower overall revenues in 2026, we still anticipate higher EBITDA and an improved EBITDA margin. Specifically, we’re excited about what we see with respect to our future presence in key emerging markets, such as historical live racing and prediction markets. While I don’t want to give away too much information now, it’s no secret that we have been making early and concrete preparations for these launches.

In addition, we have completed an important organizational realignment through the appointment of Morten Tonnesen as our new COO and promoted Garrick Morris to Executive VP of Global Content, US and Canada at the start of this month. With Morten driving operational leverage and implementing Bragg’s ambitious AI-first company transformation and Garrick focused on US and global content expansion, we believe we’re uniquely positioned to provide the robust iGaming ecosystems required by leading players in the evolving historical and live racing and prediction markets, and that Bragg will stand out as a sole B2B provider operating at the convergence of iGaming, sports, and predictions. In summary, Bragg is well-placed to become a global B2B leader in content, engagement, and infrastructure. Our strategy is squarely focused on delivering sustainable, high-margin growth and achieving cash profitability. The key pillars positioning us for a successful 2026 and beyond are proprietary content leadership.

We continue to expand our portfolio of exclusive, fully owned IP, which is a significant margin contributor and provides compounding, recurring long-term revenue. Fourth quarter proprietary content revenue increased 20.8% compared to the same period last year and currently makes up 15.7% of all revenue when split by product mix. The second pillar is geographic and product diversification. We accelerate growth in high-value regulated markets like the U.S. and Brazil, while expanding our presence into new evolving verticals such as historical and live racing and prediction markets. Our expansion outside the Netherlands continues its strong trajectory with 76% of our total 2026 revenue projected to come from non-Netherlands markets. We achieved record fourth quarter 2025 revenue in our key growth markets, including a 55% year-over-year increase in the United States and 42.1% increase in Brazil.

When factoring out the Netherlands contraction, we are pleased to see 5.1% year-over-year revenue growth across our other markets in fourth quarter 2025. The third pillar is operational excellence and AI. Utilizing our Bragg AI Brain Initiative and recent organizational realignment to streamline internal processes, enhance overall efficiency, and deliver operational leverage for a more resilient financial foundation. Having only just announced the Bragg AI Brain Initiative during the first week of 2026, we are already well on our way toward becoming an AI-first company. The fourth pillar is path to positive EBIT through product mix optimization, geographic diversification, and aggressive operating expense reductions, including a 12% global workforce reduction for an anticipated EUR 4.5 million in annualized cash savings.

We are focused on achieving our goal of positive EBIT by late 2026 as we advance further along the path toward net profitability. As we keep our focus on improving product mix, processes, and margins, delivering operational leverage, we expect lower revenue will still drive higher EBITDA in 2026. Specifically, we currently project full year 2026 revenue of between EUR 97 million and EUR 104.5 million and adjusted EBITDA of between EUR 16 million and EUR 19 million. Finally, before we open up today’s call to questions, I would like to personally thank Kent Young for his many contributions to Bragg and wish him all the best in his future endeavors now that he has retired from the Bragg board. At the same time, I’m excited that we have attracted an iGaming luminary of Thomas Winter’s caliber to succeed Kent on the board.

Thomas’s proven track record in the iGaming industry, his strategic vision, and his extensive corporate governance experience will be invaluable as we continue to expand our global footprint and offerings. I very much look forward to his contributions, and I’m confident that his expertise will help drive our future success. Thank you. Robbie and I are now available to take any questions you may have.

Kelvin, Conference Operator: Ladies and gentlemen, we will now begin the question and answer session. As a reminder, to ask a question, please press the star button followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. One moment please for your first question. Your first question comes from the line of Julian Catucci of Haywood Securities. Please go ahead.

Julian Catucci, Analyst, Haywood Securities: All right. Good morning. If I could just ask on proprietary content, could you confirm the growth in this product line? Secondly, what does the pipeline appear to look like for the year from a cadence of content perspective for proprietary content?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Sure. Thanks for the question. In terms of growth, we were able to achieve more concentration from proprietary content in 2025, really than we ever have historically. Sixteen point six percent is the concentration of revenue we were able to generate from our proprietary content, and that totaled to about EUR 4.3 million. Four point three million was our total for Q4 2025. Just to give you a sense of growth, we were at EUR 3.6 million at Q4 2024 and EUR 3.1 million at Q4 2024. Quarterly, our cadence is increasing quite dramatically, and we believe that that’s a continuing trend that’s gonna accelerate our margins through 2026.

Julian Catucci, Analyst, Haywood Securities: Okay. Thank you for that, Robbie. Just on the cadence or on a pipeline of content development, how does that look for the year? Should we expect activity in like in line to like historical content development, or are things gonna be a bit accelerated? How’s the IP perspective looking?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Yeah. From an investment perspective, so from a cadence of game production, we will maintain a very similar cadence. We are looking and utilizing the tools that we have. Mats’s talked about AI Brain and other initiatives that we have developed or in development. This really speaks to us not only just producing content, but producing content that’s really gonna maximize lifetime values for operators. We’re conscious, and I’ve talked about this in the past, how cadence is very important for us to maintain good relationships and be topical for operators. But we know it takes more than that, and we’re very focused on that lifetime value maximization through the titles that we offer.

We’re confident that we’re gonna be able to keep penetrating and increasing our market share in the U.S.

Julian Catucci, Analyst, Haywood Securities: Perfect. Helpful color there. Just on the U.S. market, it does appear like it was a record for you guys in the fourth quarter. Is that being largely, like, driven by proprietary IP, or are there other factors that are helping your growth in the U.S. market?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Yeah. Our U.S. offerings right now, it’s primarily proprietary, but also exclusive content. We don’t do any aggregation, so it’s all high margin products that are being offered into that market. The U.S. market just is just so ripe for iCasino. As a reminder, 12% of the U.S. population is under iCasino regulation, and that’s just a drop in the bucket. Now, there’s always rumblings of changes, but even without new states coming on, the growth rates you’re seeing, like in New Jersey, as an example, in 2025, iCasino performance was up 22% year-over-year. Sportsbook was only up 7.5%. In Pennsylvania, very similar, iCasino up 27%, sportsbook only up 18%.

The growth that is there in the iCasino market in the US is extremely exciting, and we are well-positioned to keep penetrating that growth.

Julian Catucci, Analyst, Haywood Securities: Okay, thanks, Robbie. Just one last one on cost savings. I think you said the charge is gonna be about EUR 1 million this quarter, Q1. Like, do you expect that to start helping OpEx in the second quarter, or how should we be thinking about the timing of the benefits to your operating expense line?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Yeah, good question. The benefits start immediately. The total amount of those benefits on an annualized basis is about EUR 4.5 million. Those have all been baked into the guidance that we have provided. We do assume those cost savings in the guidance that we have provided. Correct, the one-time expense will hit Q1 of 2026.

Julian Catucci, Analyst, Haywood Securities: Okay. Thanks, guys. I’ll pass the line.

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Thank you.

Kelvin, Conference Operator: Your next question comes from the line of Jack Cordera of Maxim Group. Please go ahead.

Jack Cordera, Analyst, Maxim Group: This is Jack Cordera calling in for Jack Brenner. Thanks for taking my question. Just a quick one, kind of wanting to clarify, you know, given your comments on the Netherlands headwinds and, you know, comparatively the large rapid growth in emerging markets, can you give a bit of color and kind of parse out the geographic mix for Netherlands, U.S., and Brazil? Any commentary there would be helpful.

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Sure. Are you looking more 2025 or 2026?

Jack Cordera, Analyst, Maxim Group: 26%, kind of on a percentage basis, like, you know, obviously, there’s some randomness there, but, you know, any color on kind of where you expect the percentages to land on a full year basis?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Yeah. You know, I think start with Brazil. Brazil, we were able to achieve significant growth in that market, this past 2025 year. The concentration of our revenue for Brazil, you know, exceeded 10%, and we’re very happy about that performance. We do think there’s lots of opportunity for expansion in Brazil. Our focus in Brazil for 2026 is definitely more pushing more margin accretive products. So, pushing more of our proprietary content, utilizing our relationship with RapidPlay, which is the local studio we’ve made an investment in. So we’re still bullish that Brazil will see good growth. We should be growing in double digits. But that margin. Sorry, that product mix is more important to us.

We’re very focused on getting more of our revenue coming from more margin accretive products. U.S. as well, we see proprietary content, exclusive content for 2026. Great opportunities. We do think we should be able to maintain good, steady double-digit growth in that market. As I talked to you before, the U.S. iCasino market is growing very solidly, and we’re very well-positioned to keep gaining market share as that market grows.

Jack Cordera, Analyst, Maxim Group: Okay. You know, maybe if I could ask the question a little bit differently, kind of trying to bridge the gap, you know, taking the midpoint of guidance, you know, the revenue’s down slightly, obviously, because of the Netherlands headwind. You know.

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Yeah

Jack Cordera, Analyst, Maxim Group: If I were to back out the Netherlands percentage, maybe just that percentage on a year-over-year basis, is there any like, kind of how do I bridge the gap between, you know, growth in other emerging markets?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Yeah. All right.

Jack Cordera, Analyst, Maxim Group: versus like Netherlands?

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Great question. If we factor out the Netherlands, we have a few things happening in 2026. One, as mentioned, BetCity is rolling off in Q2, so that does have an impact. Also, the Netherlands instituted another tax increase for the year, so we are seeing decreases in that market. If we factor out those elements, we do believe, and our guidance implies a growth rate for the rest of our business to be very close to double-digit growth. Again, similar story to 2025, where there are macro conditions that are keeping our growth rates under where we would expect our business to be growing at.

Underlying that, our business in key jurisdictions is growing at a nice, steady rate, which we’re extremely excited about.

Jack Cordera, Analyst, Maxim Group: Okay. That’s very helpful. Thanks for taking the question.

Robbie Bressler, Chief Financial Officer, Bragg Gaming Group: Yep.

Kelvin, Conference Operator: There are no further questions at this time. With that, I will now turn the call over to Matevž for final closing remarks. Please go ahead.

Matevž Mazij, Chief Executive Officer, Bragg Gaming Group: Thanks, everyone, for joining. Look forward to speaking to you in subsequent quarters. Have a great day.

Julian Catucci, Analyst, Haywood Securities: Thank you very much.

Kelvin, Conference Operator: Ladies and gentlemen, this concludes today’s call. We thank you for participating. You may now disconnect your line.