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Gaming Innovation Group (GiG) reported a new high-water mark for revenue in Q4 2022 and revealed more details about separating its two core business units.

Topline numbers

GiG’s total revenue for Q4 2022 was €26m, representing a 44% increase year-on-year and an all-time high for the company.

Adjusted EBITDA for the quarter came in at €10.8m, up 71%, at a margin of 41.4%.

Breaking the figures down by business segment, affiliate arm GiG Media delivered all-time-high revenue of €17.8m, demonstrating all organic year-on-year growth of 40%.

Adjusted EBITDA for GiG Media was €8.9m, a 52% increase year-on-year, at a margin of 50%.

Elsewhere, the firm’s Platform and Sportsbook division also reported all-time high revenue of €8.2m, up 54%, of which 24% was organic.

Adjusted EBITDA for the division came in at €1.8m, at a margin of 22%.

Finally, GiG generated positive cash flow across all its operations of €8.5m, a significant increase from the previous year’s figure of €4.9m.

For the full year 2022, GiG reported revenue of €90.1m, a 36% increase on 2021.

GiG Media revenue totalled €61.7m for 2022, up 37% compared to 2021, with adjusted EBITDA of €29.6m, up 41% year-on-year.

The Platform and Sportsbook business generated annual revenue of €28.3m, a 33% increase year-on-year. Adjusted EBITDA for the segment came in at €4.6m, up 163% on 2021.

News nugget

The big news this morning was that GiG has decided to investigate separating its media division from its platform business to establish two independent publicly listed companies.

GiG believes the split will allow the two businesses to grow much faster than in the current corporate structure.

CEO Richard Brown said the decision to initiate a strategic review into separating the group came as a result of the strength of the group’s performance over the last few years.

While the two business units already operate separately, establishing separate structures would better serve the company’s capital allocation principle, according to Brown.

Focusing and dedicating resources to each unit would ultimately drive shareholder value, he added.

While the strategic review will start immediately, Brown said that there is no fixed timeline for the separation. He said there was no rush as the businesses were performing well in the near term.

GiG stock is currently dual listed on the Oslo Stock Exchange and Nasdaq Stockholm. A location for the separate listings will be explored in due course.

In addition to its financial success in Q4, GiG also reported all-time high player intake, with first-time depositors (FTDs) reaching 115,900, up 91% year-on-year.

Best quote

Brown’s reply when asked during the firm’s Q4 results call whether the decision to split the group was a result of limited synergies between the two business entities:

“The decision is not about realising any synergies. It’s about what the opportunities for each businesses are as a group or independently in the long term.”

Best question

Brown was asked about both the historical performance of and GiG’s future plans for the acquired AskGamblers site.

While he was reluctant to comment on the past given the data was disclosed by a competitor (Catena Media), he stressed the brand has “always been a very powerful force within the affiliate marketing space”.

“It has obviously been affected by regulatory changes, but this has impacted the entire industry, and more importantly, it’s in the past,” Brown said.

“I’m not too concerned about what the historical elements were,” he added. “We see a lot of opportunity, we have a strong belief in our own marketing technology and operating principles that we think we can take assets and, as we’ve demonstrated that on our own asset portfolio, really grow them and drive them forward.”

When asked whether the firm had identified any low-hanging fruit or whether it was more of a long-term progress, he said it was a combination of both.

“In any post-merger integration plan, you’re going to be identifying both the short, mid, and long-term opportunities. As with all, we are not going to rush anything, we are going to execute correctly and effectively for the long-term strength of the website portfolio.”

Current trading and outlook

The company said that January has developed positively, and revenue was up 29% compared to the same period last year.

GiG has also reaffirmed its long-term financial targets. The company aims to achieve annual organic revenue growth of around 20%.

Additionally, GiG’s target is to achieve an adjusted EBITDA margin of more than 50% by 2024.

Investors reacted positively to GiG’s separation plans and the company’s Q4 results. Shares in GiG were trading around 2% higher at the time of writing.