In what is seen as a strategic pivot to bolster its business prospects, GiG, a front-running igaming conglomerate, took the iGaming industry by storm with its plan to bifurcate its business divisions. This colossal stride, initiated at the dawn of 2023 with GiG commencing a strategic examination in February, stands as a testament to the forward-thinking vision of the company. The anticipated split, slated for completion in the year to come, will streamline GiG into two distinct, specialized entities: GiG Media and the Platform & Sportsbook division.
GiG Media, which houses all media-centric services such as affiliate lead generation, is expected to operate independently, harnessing its capability to reach and engage gaming enthusiasts worldwide. Conversely, the Platform & Sportsbook division is slated to be a standalone enterprise, housing sophisticated igaming platforms inclusive of Sportnco— a strategic acquisition that took place in April 2022— along with the company’s foray into front-end development and other managed services.
The year 2023 has witnessed GiG industriously laying the groundwork for this divisional segregation, exemplified by a series of high-caliber executive placements. Richard Carter is set to spearhead the Platform and Sportsbook business as CEO, while Jonas Warrer was appointed to manage GiG Media. This strategic reshuffle was accompanied by the premature departure of Richard Brown from the CEO position in September, a maneuver that preempted his scheduled exit at year’s end. Brown pivoted to take the helm at Glitnor Group come January.
Another noteworthy corporate evolution for GiG was its acquisition of KaFe Rocks in November, a move geared towards accelerating its dominion in the burgeoning North American market. This followed the earlier procurement of AskGamblers in January 2023, cementing the company’s ambitions for regional expansion.
Despite these dynamic changes, GiG’s financial health remained robust, showcasing substantial revenue and net profit ascension year-on-year for 2023. The chairman, Petter Nylanderr, could not help but celebrate the group’s achievements and growth capability for the forthcoming years. “Looking ahead, we remain committed to our strategic objectives, including the planned split of the company into two separate entities,” Nylanderr expounded. “This strategic move will unlock new growth opportunities and maximize value for our shareholders.”
As the company gears up for the transformation in 2024, leadership exudes confidence, committing to establishing new long-term financial targets for both GiG Media and Platform & Sportsbook segments. Further solidifying this optimism was the disclosure of the 2023 consolidated group revenue which soared to €126.m, marking a 40.8% year-on-year improvement. However, in alignment with the foreseen schism, Platform & Sportsbook has been categorized as a discontinued operation.
In its latest annual roundup, GiG reported a consolidated revenue spike of 44.4% at €89.1m, exclusively attributed to GiG Media’s performance, bolstered by heightened publishing revenue and a 34.0% uptick in first-time depositors. Revenue from the Platform & Sportsbook arm also flourished, totaling €37.8m courtesy, in part, to the Sportnco acquisition, enhancing GiG’s footprint across 29 markets.
Digging deeper into GiG’s financials and solely focusing on the GiG Media business, operating expenses saw a 50.9% surge at €48.9m, alongside escalated costs for depreciation, amortization, and financial expenditure. Despite these increased outlays, GiG recorded a €16.7m pre-tax profit, albeit a 15.2% dip from the previous year. After a €3.3m tax liability, the net profit emerged at a resilient €13.4m, albeit a 29.1% contraction. Adjusted EBITDA, however, for GiG Media leaped by 36.4% to reach the €40.1m landmark.
Inclusive in GiG’s financial report was a €2.4m profit from the soon-to-be autonomous Platform & Sportbook assets, a considerable turnaround from last year’s €13.2m deficit. When accounting for a negligible loss from discontinued operations and foreign currency translation differences, GiG’s all-encompassing net profit swelled by 383.3%, setting a record at €14.5m versus €3.0m in 2022.
As for the closing quarter of 2023, the narrative of growth persisted. Consolidated group revenue burgeoned by 36.3% to €35.6m, with GiG Media’s consolidated figures alone reflecting a 48.9% surge to €26.5m. GiG Media first-time depositors soared to an all-time quarterly zenith of 137,600, with income streams diversified amongst paid media, revenue share agreements, cost per acquisition, and additional service fees.
Moving to the Platform & Sportsbook sector, quarterly revenue climbed by 11.0% at €9.1m. GiG announced that a sizable majority of operator gross gaming revenue originated from jurisdictions that were either already regulated or on the cusp of regulation, cementing the company’s presence in diverse regions like Europe, North America, and Latin America.
However, aligned with the revenue spike, operating expenses catapulted by 68.5% to €15.0m, pushing pre-tax profits down by 63.9% for the quarter and, after taxation, leaving mere €402,000 in profits – a steep drop of 92.6%. Notwithstanding this, adjusted EBITDA remained buoyant, charting a 29.2% enhancement to €11.5m.
With the Platform & Sportsbook segment factored in, the quarter’s finale was less rosy as losses from assets held for distribution totaled €4.3m and, coupled with adverse currency exchange impacts, culminated in a comprehensive net loss of €4.6m for Q4—a stark difference from the €108,000 profit of the previous year.
As GiG steps into its future, carved by strategic segregation, the credibility cemented by its financial prowess provides the platform for what many speculate to be an epoch of unparalleled growth, success, and shareholder value maximization.
