Executive Summary

Q3 2022 revenue rose 19.4% year over year to $9.59M (vs. $8.03M) on stronger Italian B2C performance; operating loss was roughly flat at $(3.09)M, and net loss widened modestly to $(3.82)M .
Mix and execution improved: sportsbook hold increased to 18.8% (from 14.9%), selling expenses fell to 4.1% of turnover (from 3.7%), and European operations reached net profitability for the nine months, but USD strength masked Euro-denominated gains .
Management announced strategic catalysts for 2023: >100 signed Ohio host locations, U.S. mobile partnership with Lottomatica on pace for Q1 2023, and Virtual Generation (VG) launch targeted for mid-2023 with explicit earnings objectives; no formal revenue/EPS guidance ranges were provided .
Near-term stock reaction catalysts: confirmation of U.S. mobile launch timing and Ohio retail ramp, VG regulatory certification progress, and evidence of U.S. cost containment at USBookmaking (USB) following management’s restructuring actions .

What Went Well and What Went Wrong

What Went Well

European operations returned to profitability; management achieved its profitability goal ahead of schedule in Europe for the nine-month period .
Italian sportsbook KPIs improved: sportsbook hold rose to 18.8% in Q3 2022 (vs. 14.9% in Q3 2021), contributing to a blended GGR of 7.0% (vs. 6.3%) and supporting higher net gaming revenues .
Strategic momentum: “The road map we set out in 2016 has come full-circle with European operations streamlined and returned to profitability…Our U.S. strategy has also proven to be a tremendous success” (Executive Chairman Michele Ciavarella) .

What Went Wrong

Consolidated results still loss-making: Q3 2022 net loss of $(3.82)M (vs. $(3.52)M) and nine-month net loss of $(10.19)M, driven by operating losses and non-cash charges (contingent consideration accretion) .
U.S. USBookmaking underperformed: USB produced a nine-month net loss of ~$1.62M on ~$0.9M revenue, with higher personnel and intangible amortization costs; mediation with USB management is planned .
FX headwinds: USD strengthened ~11% vs. EUR, masking Euro-denominated growth; gaming tax rate increased due to business mix shift, pressuring margins .

Financial Results

Consolidated Performance vs. Prior Year and Prior Quarter

Metric	Q3 2021	Q2 2022	Q3 2022
Revenue ($USD Millions)	$8.03	$10.3	$9.59
Loss from Operations ($USD Millions)	$(3.10)	$(3.5)	$(3.09)
Net Loss ($USD Millions)	$(3.52)	N/A	$(3.82)
Diluted EPS ($USD)	$(0.15)	N/A	$(0.14)

Notes: Q2 2022 net loss and EPS not disclosed in the Q2 press release; detailed values would typically appear in the Q2 10-Q, which is not included in the available document set.

Margins and Efficiency Metrics

Metric	Q3 2021	Q2 2022	Q3 2022
Sportsbook Hold (%)	14.9%	16.6%	18.8%
Blended GGR (%)	6.3%	N/A	7.0%
Gaming Tax Rate (% of GGR)	24.4%	N/A	24.1%
Selling Expenses (% of Turnover)	3.7%	4.2%	4.1%

Disaggregated Revenue Drivers (Italy)

Metric	Q3 2021	Q3 2022
Total Turnover ($USD Millions)	$163.67	$166.49
Web-Based GGR ($USD Millions)	$10.14	$11.02
Land-Based GGR ($USD Millions)	$0.16	$0.72
Net Gaming Revenues ($USD Millions)	$7.79	$8.91
Service Revenues ($USD Millions)	$0.24	$0.68

Guidance Changes

Metric/Initiative	Period	Previous Guidance	Current Guidance	Change
Ohio retail host locations	2023	Plan to enter Ohio in 2023 (partnership with Wright Bet)	“Over 100 signed Host locations in Ohio” strong start to 2023	Raised operational milestones
U.S. mobile partnership (Lottomatica)	Q1 2023	Building dedicated SBP; positioned for strong H2’22	“On pace for 2023 launch” (Q1-23)	Timing affirmed
DC small-business model (CBE Class B JV)	2H 2022–2023	Second venue application at Cloakroom; expand footprint rapidly	Continue expansion with standardized onboarding format	Maintained
Italian land-based rollout	Q3–Q4 2022; Q1 2023	~100 ADM rights; reopen to add ~$20M per year at full recovery	Deployed ~44 of 100; on pace to open remaining 56 by end of Q1-2023	Maintained/Execution update
Virtual Generation (VG)	Mid-2023	Certify platforms; additional B2B opportunities	ADM certification underway; mid-2023 launch; target 20% of €3B market with ~€1.0M initial earnings and up to €5.0M third-party growth in 2024; ~€1.6M via Multigioco in first 6–12 months	New explicit targets

Note: No formal numeric revenue/EPS guidance ranges were provided; management emphasized operational milestones and qualitative outlook .

Earnings Call Themes & Trends

Call transcript was not available in the document catalog; themes tracked from 10-Q MD&A and earnings press releases.

Topic	Q1 2022 (prior)	Q2 2022 (prior)	Q3 2022 (current)	Trend
U.S. mobile & technology	Began Ocean NJ operations; platform build; US expansion focus	Ocean “Gallery Sportsbook” go-live; SBP build for Lottomatica	Lottomatica mobile on pace for Q1-23; U.S. retail and digital distribution emphasized	Strengthening execution
Italy land-based recovery	Ulisse closed; mix shift to web; planning land-based reopen	~80 ADM rights targeted; reopen expected to add ~$20M/yr	~44/100 rights deployed; remaining by Q1-23; land-based GGR >4x YoY	Accelerating
Product performance	Sportsbook hold 18.3% (Q1); casino 4.3%	Sportsbook hold 16.6% (Q2)	Sportsbook hold 18.8% (Q3); blended GGR 7.0%	Improved QoQ/YoY
Macro/FX	FX sensitivity; COVID impacts	USD strength narrowed growth	~11% USD appreciation vs EUR; masked Euro growth	Ongoing headwind
Regulatory & certification	ADM licenses; Ocean migration; DC Class B model	Standardized DC onboarding model	VG ADM certification underway; mid-2023 target	Progressing
U.S. USB cost structure	Notable G&A and SBC; losses	Excessive admin costs; restructuring and severance	USB net loss; mediation planned; cost review	Needs improvement

Management Commentary

Executive Chairman Michele Ciavarella: “The road map we set out in 2016 has come full-circle with European operations streamlined and returned to profitability…Our U.S. strategy has also proven to be a tremendous success…These two extremes of the retail distribution channel put Elys in league of its own…” .
Ciavarella on U.S. mobile: “Elys has also advanced the build-out of its U.S. digital solution to provide sportsbook technology and services for industry giant Lottomatica for a potential launch in Q1-23” .
Interim CFO Carlo Reali: “Our online betting revenue grew in Q3-2022 by approximately $0.9 million over Q3-2021 and our land based revenue more than doubled to $0.7 million…Commissions paid to agents represented 4.1% of turnover compared to 3.7%” .
Reali on VG: “Our VG product will add a significant boost to our operating profit…capture 20% of the $3 Billion Italian market…combined earnings of approximately €1.0 million and additional growth in 2024 of up to €5 million” .

Q&A Highlights

Q3 2022 earnings call transcript was not available in the document catalog; therefore, Q&A themes and any guidance clarifications could not be extracted.

Estimates Context

Wall Street consensus (S&P Global) for Q3 2022 EPS and revenue was unavailable due to missing CIQ mapping for ELYS; as a result, estimate comparisons could not be provided. If available, results would be benchmarked against S&P Global consensus to determine beats/misses.
Given stronger revenue growth and improved sportsbook hold, near-term estimate revisions may focus on Italy segment profitability and U.S. cost containment while accounting for FX headwinds and higher gaming tax rates .

Key Takeaways for Investors

Italy-led recovery: Web and re-opening land-based channels drove revenue and KPI improvements, with European operations achieving net profitability for the nine months; watch continued rollout of remaining ADM rights through Q1 2023 .
FX masking fundamentals: USD strength (~11% vs EUR) suppressed USD-reported growth; underlying Euro performance is stronger than GAAP translation shows .
U.S. execution pivot: Lottomatica mobile launch targeted for Q1 2023 and Ohio retail with >100 hosts are key catalysts; confirmation of timing and initial ramp should be stock-moving .
VG as margin accretive: Mid-2023 launch targeted with explicit earnings objectives; successful ADM certification and early adoption could lift consolidated margins .
Cost discipline and USB remediation: Management is restructuring and evaluating USB; reducing excessive administrative costs and clarifying the path to profitability in U.S. operations is critical .
Mix and tax headwinds: Higher sportsbook hold offsets a mix shift toward lower-margin casino; gaming tax rate elevated due to business mix and jurisdiction, requiring continued focus on pricing and product mix .
Funding and liquidity: The company raised equity in June 2022 and used equipment funding for Ohio expansion; monitor cash burn versus ramp milestones and any need for incremental capital .

Citations: All data and statements are sourced from Elys Game Technology’s Q3 2022 8-K and press release , Q3 2022 10-Q –, Q2 2022 8-K and press release –, and Q1 2022 10-Q –. Estimates were unavailable via S&P Global due to missing CIQ mapping (tool error).

Elys BMG Group, Inc. (ELYS)·Q3 2022 Earnings Summary