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GAN Ltd (GAN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $29.4M (-4% YoY) as B2C strength in Europe and Latin America was offset by a sharp B2B decline following the expiration of a multistate B2B contract; adjusted EBITDA was -$1.5M and net loss was -$6.8M .
  • Sequentially softer vs Q4 2024 (revenue $31.7M, adjusted EBITDA ≈ breakeven), driven by the B2B reset; B2C growth and lower opex partially mitigated the impact .
  • Merger timing with SEGA SAMMY reaffirmed for 2Q25 and the merger agreement “End Date” was extended to May 31, 2025 to secure remaining gaming approvals—an important near-term stock catalyst .
  • No earnings call was held due to the pending merger, limiting incremental narrative and Q&A color for investors this quarter .

What Went Well and What Went Wrong

What Went Well

  • B2C outperformed: B2C revenue grew to $24.3M with segment contribution margin at 64.9%; management emphasized strength in Europe and Latin America. “Our B2C results were particularly strong and underscore the strength of our market position in European and Latin American markets.” — Seamus McGill, CEO .
  • Improved unit economics: B2C sports margin increased to 8.6% and the B2C marketing spend ratio fell to 18% YoY, signaling more efficient acquisition/retention dynamics .
  • Cost actions: Operating expenses declined to $23.7M from $24.6M YoY, reflecting reduced compensation and headcount from ongoing cost initiatives .

What Went Wrong

  • B2B reset: B2B revenue dropped to $5.1M (vs. $12.3M YoY) and B2B Gross Operator Revenue fell to $144.6M (vs. $632.0M YoY) due to the expiration of a multistate B2B contract; B2B segment contribution fell materially .
  • Profitability: Net loss widened to -$6.8M (vs. -$4.2M YoY) and adjusted EBITDA deteriorated to -$1.5M (vs. -$0.6M YoY), despite cost control and B2C growth .
  • Limited transparency: With no conference call amid merger activity, investors lacked Q&A clarifications (e.g., B2B pipeline timing, contract replacement cadence) .

Financial Results

Consolidated Metrics (USD)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$37.10 $31.69 $29.37
Operating (Loss)/Income ($USD Millions)$2.13 $(2.66) $(5.05)
Net Income (Loss) ($USD Millions)$2.08 $(4.15) $(6.83)
Adjusted EBITDA ($USD Millions)$5.41 $0.01 $(1.51)
Diluted EPS ($USD)$0.04 $(0.09) $(0.15)
Cash and Equivalents ($USD Millions)$36.5 $38.7 $39.9

Segment Breakdown (USD)

MetricQ3 2024Q4 2024Q1 2025
B2B Revenue ($USD Millions)$16.38 $9.01 $5.09
B2C Revenue ($USD Millions)$20.72 $22.68 $24.28
B2B Segment Contribution ($USD Millions)$14.10 $6.11 $2.90
B2B Segment Contribution Margin (%)86.1% 67.9% 56.9%
B2C Segment Contribution ($USD Millions)$13.08 $14.63 $15.76
B2C Segment Contribution Margin (%)63.1% 64.5% 64.9%
Total Segment Contribution ($USD Millions)$27.18 $20.75 $18.66
Total Segment Contribution Margin (%)73.3% 65.5% 63.5%

Revenue by Geography (USD)

GeographyQ3 2024Q4 2024Q1 2025
United States ($USD Millions)$14.08 $8.65 $4.74
Europe ($USD Millions)$12.16 $14.44 $15.47
Latin America ($USD Millions)$8.36 $8.01 $8.41
Rest of World ($USD Millions)$2.50 $0.59 $0.75
Total ($USD Millions)$37.10 $31.69 $29.37

KPIs

KPIQ3 2024Q4 2024Q1 2025
B2B Gross Operator Revenue ($USD Millions)$610.4 $651.2 $144.6
B2B Take Rate (%)2.7% 1.4% 3.5%
B2C Active Customers (000s)226 212 235
B2C Marketing Spend Ratio (%)24% 17% 18%
B2C Sports Margin (%)7.2% 8.5% 8.6%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Merger close timing (SEGA SAMMY)2025Early 2025 (Q3’24 PR) 2Q25 (Q4’24 & Q1’25 PR) Updated (clarified to 2Q25)
Merger Agreement End Date2025Feb 7, 2025 Extended to May 31, 2025 Extended
Financial guidance (Revenue/Margins/OpEx)Q1 2025None provided None provided Maintained (no guidance)

Earnings Call Themes & Trends

Note: No earnings call or transcript for Q1 2025 due to pending merger .

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Merger/Regulatory approvalsNevada Gaming Commission approval; expect early 2025 close Expect 2Q25 close; progressing through approvals Reaffirm 2Q25 close; End Date extended to May 31, 2025 Timing clarified; administrative extension
B2B contract dynamicsExpansion in Nevada; partner exit in Michigan boosting B2B B2B lower due to partner exit; full year B2B growth B2B down sharply due to expiration of multistate contract Headwind intensified
B2C regional performanceEurope growth; LatAm mixed (FX, activity) Europe up; LatAm weaker/FX Europe & LatAm strong; B2C revenue up YoY Improving B2C trajectory
Cost structure/OpExOperating costs down ~10%; cost rationalization Operating expenses down materially YoY Operating expenses down YoY; continued cost initiatives Sustained discipline
Sports margin7.2% 8.5% 8.6% Improving
Active customers226k 212k 235k Recovering

Management Commentary

  • “I’m pleased with the continued progress during the first quarter as we continue to execute on our business plan while refining our cost structure. Our B2C results were particularly strong and underscore the strength of our market position in European and Latin American markets. We are nearing the conclusion of the regulatory requirements to close our merger with Sega Sammy, which we expect to be successfully completed in the second quarter of 2025.” — Seamus McGill, CEO .
  • “The parties continue to respond to regulatory requests. This process takes time, but we are making great progress and working with SEGA SAMMY in anticipation of a successful closing.” — Merger agreement extension announcement .

Q&A Highlights

  • GAN did not host an earnings call for Q1 2025 due to the pending SEGA SAMMY merger; therefore no Q&A or additional guidance clarifications were provided .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable for GAN this quarter due to missing CIQ mapping, so vs-estimates comparisons could not be provided (S&P Global data unavailable).

Key Takeaways for Investors

  • B2B reset is the principal headwind: expiration of a multistate contract drove B2B revenue down to $5.1M and B2B GOR to $144.6M; near-term recovery depends on contract replacements and pipeline execution .
  • B2C momentum and unit economics improved: revenue rose to $24.3M, sports margin reached 8.6%, and the marketing spend ratio fell to 18%, supporting contribution margins of 64.9% .
  • Cost discipline continues to mitigate topline pressure: operating expenses declined YoY amid compensation and headcount reductions; watch the sustainability as B2C scales and potential B2B wins return .
  • Profitability inflected negatively QoQ: net loss widened to -$6.8M and adjusted EBITDA fell to -$1.5M versus roughly breakeven in Q4; monitor whether B2C strength and cost actions can offset B2B weakness in coming quarters .
  • Solid liquidity: cash increased to $39.9M at March 31, 2025, providing flexibility through merger closing and operational transition .
  • Merger timeline is the key catalyst: reaffirmed 2Q25 closing and End Date extension suggest administrative progress; closing could reset investor focus to combined strategic roadmap and potential platform synergies .
  • Near-term trading lens: absence of a call means limited incremental data; stock likely trades on merger milestones and any signs of B2B stabilization, while B2C strength and sports margin provide a floor to contribution .