Bragg Gaming revenue falls 23% as cash generation takes priority

Bragg Gaming Group has reported a 23% fall in third-quarter revenue to €20.6 million, as customer migrations and changes in how operators buy games outweighed growth in its proprietary content business.

The online casino games and technology supplier released its results on 13 November, a week after Morten Tonnesen became interim chief executive. Adjusted EBITDA fell to €3 million from €4.4 million, while the group’s net loss widened to €4.3 million from €2.3 million.

“Our cost reductions have not yet caught up with the revenue we have lost,” Tonnesen said in the results statement.

Chairman Matt Davey subsequently told the earnings call that the board and key shareholders were prepared to provide financial flexibility. With cash and cash equivalents of €2.5 million at 30 September, the practical task is to bring investment and the cash generated by the business into a more sustainable balance.

Amounts are rounded. Adjusted EBITDA is a non-IFRS measure defined by Bragg; it differs from statutory profit and cash flow.

Customer migrations change the revenue base

Tonnesen identified two main pressures: customers moving off Bragg’s Dutch platform and third-party games suppliers in Brazil connecting directly with operators.

Both expose the commercial position of an intermediary. A customer can continue taking bets after moving to another platform, while a direct supplier agreement can remove revenue previously earned through aggregation. Bragg needs the value of its own technology and content to support those relationships as purchasing patterns change.

Its non-IFRS normalised revenue measure, which excludes BetCity and the newly acquired Drayton International, offers a narrower comparison. That figure was €20 million: 12% below the same quarter last year and 4% above the second quarter. The sequential improvement is a useful sign of stabilisation, although the annual decline remains substantial.

Brazil adds a separate risk after quarter-end. Bragg says it stopped supplying its licensed Brazilian customers from 6 October following Brazil’s betting ban. That cessation postdates the period covered by these results.

The company says its Brazilian revenue was mainly lower margin aggregated content, giving it a smaller contribution to gross profit and cash flow than to sales. That assessment explains management’s view of the financial exposure; future market access remains dependent on the regulatory position.

Gross margin improves as gross profit falls

Bragg’s gross margin improved to 56%, helped by a greater proportion of proprietary content and lower volumes of aggregated games. Its own content revenue in the US and Canada grew 7% in the quarter and 21% over nine months, according to the company.

Those gains sit alongside a smaller overall revenue base. Gross profit fell to €11.6 million from €14.7 million. The €3.1 million reduction exceeded approximately €1.6 million in operating cost savings identified in the results.

This is the immediate difficulty in the transition. A more favourable mix of sales can improve the margin percentage while producing fewer euros to cover operating expenses.

Restructuring programmes announced in January and July have reduced Bragg’s global workforce by approximately 27%. The company expects combined annualised savings of about €10.5 million once the measures are fully implemented. That expected annual benefit needs to be distinguished from savings already reflected in the quarter.

A smaller organisation must also sustain its games pipeline and service operator partners. The success of the cost programme will depend partly on preserving the capacity needed to generate the next phase of revenue.

The cash flow gap is visible in the accounts

The nine-month financial statements show €6 million of cash generated from operating activities, down from €9.5 million a year earlier. During the same period, cash additions to intangible assets totalled €10.4 million, including capitalised development expenditure.

These additions sit within investing activities in the cash flow statement. Developing the products intended to support recovery therefore creates funding needs beyond those visible in adjusted EBITDA.

Cash and cash equivalents declined from €6.7 million at the end of 2025 to €2.5 million at 30 September. Current liabilities also exceeded current assets by about €3.6 million. Those are historical reporting-date balances; assessing financial headroom requires consideration of collections, investment plans, payment obligations and available facilities.

The company reported compliance with its revolving credit facility’s financial covenants at quarter-end. On the earnings call, chief financial officer Robbie Bressler identified better cash generation as a priority and discussed the financing options available to the business.

The relevant operating test is whether spending on future products can increasingly be supported by the cash those products and existing services generate. A positive adjusted earnings measure provides only part of that assessment.

An acquisition and a leadership change reshape the plan

The business has a long connection with its departing chief executive. Matevž Mazij founded Oryx Gaming, acquired by Bragg in 2018, and became group CEO in August 2023. His move to strategic adviser on 6 November leaves Tonnesen responsible for daily operations, having joined as chief operating officer in March.

The latest change follows the acquisition of Drayton International on 22 July for a stated US$9 million, paid entirely in shares. Davey became non-executive chairman when that transaction closed. The deal also released approximately €1.1 million of escrowed funds from an earlier private placement involving insiders and Davey.

By August, Bragg had withdrawn its 2026 revenue and adjusted EBITDA guidance while planning the integration of Drayton. It also disclosed that standalone revenue had been tracking below the previous forecast range.

These events make the November results part of a continuing restructuring. Management is balancing an acquired business, a changing revenue mix and a reduced cost base while trying to improve liquidity.

Davey’s latest assurance sets out an intention to support that process. It does not specify the amount, terms or completion date of a new financing package. The earlier placement and the share consideration for Drayton are separate, completed elements of the history.

What would make the recovery convincing?

In our view, Bragg’s next stage should be judged against the operating tasks management has identified: sustaining growth in proprietary games, converting the restructuring into realised savings and bringing investment requirements into balance with cash generation.

Owning more of the content creates an opportunity to retain value as operators change platforms and suppliers pursue direct connections. It also makes successful development and distribution essential. The commercial return must justify the resources committed to producing those games.

The positive signs in this quarter are visible: North American proprietary content grew, gross margin improved and the normalised revenue measure increased sequentially. The group’s wider earnings and cash position show how much work remains.

For Tonnesen and Davey, the strongest evidence of progress would be a business that can fund its product ambitions with improving operating performance. That would give the recovery a firmer basis than changes in the revenue mix alone.