GAN Q2 2020 revenue rockets 99% as Covid-19 shift online delivers “substantial growth”
US-facing online supplier hails 459% increase in gross profits as real-money internet gaming revenue increases by triple digits
GAN has reported a 99% year-on-year (YOY) increase in its revenue for the second quarter of 2020, with Q2 revenue topping $8.3m.
The online supplier revealed gross profits rocketed 459% during the period to $5.5m, with adjusted EBITDA rising substantially to a $1.9m positive figure from a previous Q2 2019 loss of $0.2m.
The strong business performance despite Covid-19 was characterized in the performance of its real-money internet gaming and simulated gaming departments, which both enjoyed a stellar Q2.
Real-money internet gaming revenue jumped 110% YOY from $2.7m in 2019 to $5.6m in Q2 2020. Simulated gaming revenue rose by 79% YOY during the same period, increasing from $1.4m to $2.6m.
At an individual market level, GAN’s US operations accounted for the lion’s share of its second quarter revenue with $7m (representing 85% of total revenue), closely followed by Italy, which generated $1.2m in revenue over the same period.
UK revenue increased to $33,000 during Q2, but rest of world revenue fell by 31% to $11,000 in the same period. GAN has said it does not plan to generate substantial revenues from the UK in 2020 unless it identifies another branded operator to sponsor its B2C online casino operations there.
In addition, GAN has said it expect no sports gaming revenue to come from its existing agreement with FanDuel from the end of August, due to the launch of the latter’s proprietary digital wallet, a service which replaced GAN’s own product.
However, GAN is launching online sportsbooks with several new customers, including Parx, which is releasing the GAN-developed iOS native app in New Jersey, and expects to launch sports betting in Michigan with three operators based there over the coming period, one of which is FanDuel.
GAN also concluded its first initial public offering in May, raising $54m in additional funding as the firm looks to become a major player in the US market.
GAN CEO Dermot Smurfit welcomed the record results for the business, despite the coronavirus pandemic impacting several key markets and clients.
“We were pleased to achieve revenues of $8.3m during the second quarter of 2020, a period during which nearly all of our land-based casino customers were forced to close their physical operations and when most major sporting events were cancelled as a result of the global pandemic,” said Smurfit.
“Our business has proven resilient to these outside forces in recent weeks, and we believe GAN can greatly contribute to both our customers’ success and the accelerated secular shift to igaming as casino operators continue to be impacted by the pandemic,” he added.
GAN has reiterated its 2020 full-year revenue guidance, estimated to be between $37-$39m.
In addition to the positive results, GAN also confirmed the launch of a new simulated gaming software client in casino and online gaming operator Penn National. GAN’s simulated gaming will now be available to casino patrons at more than 100 individual casino properties located across the US.
The mychoice social casino app will be fully integrated with Penn National’s mychoice player loyalty program, which currently has over 20 million members.
GAN CCO Jeff Berman welcomed the business being selected by a “genuine giant” of gaming, highlighting the opportunities afforded by upgrading Penn’s existing operations and integrating into its loyalty program.
“We hope this marks the beginning of a partnership that may grow beyond the opportunity of social gaming for GAN,” Berman added.