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Wednesday, June 23, 2021

GAN Ltd. (GAN) stock declines in the pre-market trading. Here’s to know why?

GAN Limited (GAN) stock soared by 0.26% in the last trading close whereas the GAN stock price declines by 8.96% in pre-market trading after GAN Ltd. announced its fourth quarter and full year 2020 financial results. GAN is a leading Retail provider of Internet gambling software-as-a-service solutions, mainly to the land-based casino industry in the United States. Coolbet, a GAN subsidiary, is a market-leading provider of proprietary online gambling technology in selected European and Latin American markets.


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Fourth Quarter and full year 2020 financial results

  • GAN Ltd. full year 2020 revenue generated as $35.2 million compared to $30.0 million for the year 2019 that is an increase of 17%. The increase in revenue is mainly due to the growth in recurring revenue-oriented services that includes RMiG B2B and SIM revenue. On the other hand, the total revue calculated in the fourth quarter 2020 was $8.9 million relative to $10.7 million in the Q4 of 2019, which is a decrease of 17% mainly due to B2C/WinStar impact.
  • The Gross Profit reported by GAN was $21.7 million compared to $18.0 million for the year 2019. While for the fourth quarter 2020 the Gross profit was $4.5 million compared to $8.9 million which is a decrease of 49% again due to the B2C/WinStar impact.
  • For the full year 2020, Net loss was $20.2 million or $0.75 per diluted share while it was $2.0 million or $0.09 per diluted share in 2019. Whereas in fourth quarter the net loss was $8.3 million compared to $3.4 million in the same period in 2019.
  • The Adjusted EBTIDA loss was $2.3 million compared to Adjusted EBTIDA of $7.9 million in 2019 mainly because of the increase in operating expenses and cost of transaction associated with the acquisition of Coolbet. Comparatively the Adjusted EBTIDA loss was $6.0 million while the Adjusted EBTIDA was $5.1 million in the year 2019. The decrease is again due to B2C/WinStar impact and also the increased operating costs in 2020.
  • And finally the operating costs and expenses reported by GAN for the fiscal year 2020 were $41.2 million compared to $16 million for 2019. Similarly the Operating costs and expenses were $12.8 million for the year 2020 and $5.9 million for 2019. The increase is because of the current year hiring in order to meet the customer’s demand and also due to the acquisition of Coolbet.

Conclusion

For the year 2021, GAN Ltd. has some high expectations because the year started off very strong for them. GAN ltd. in an outlook for the year 2021 mentioned that they are expecting their 2021 full year revenue to be $100-$105 million. The confidence shown by GAN is definitely a promising sign for the investors in case they are planning to make any long-term investment.

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