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Investing.com - Benchmark downgraded Bragg Gaming Group Inc. (NASDAQ:BRAG) from Buy to Hold on Monday following the company’s second-quarter results that missed analyst expectations. The stock, currently trading near its 52-week low of $2.86, has declined over 52% in the past six months.
Bragg reported Q2 2025 revenue of €26.1 million, falling short of the €27.8 million consensus estimate, while adjusted EBITDA of €3.5 million missed the projected €4.4 million. The company maintained its strategic focus on cash flow, integration, and margin expansion, supported by €2 million in annualized synergies realized after the quarter ended. Despite challenges, the company maintains a healthy gross profit margin of 55% and operates with moderate debt levels. InvestingPro analysis reveals 10+ additional key insights about Bragg’s financial position.
The gaming technology provider saw its proprietary content revenue grow 44% year-over-year, with particularly strong performance in the U.S. market, where revenue surged 270% compared to the same period last year. Despite these positive developments, Bragg faced significant regulatory and market pressures in two key regions that led to a cut in its fiscal year 2025 guidance.
In the Netherlands, increased gaming taxes and new deposit restrictions reduced the overall market gross gaming revenue by 25% year-over-year, with Bragg’s revenue declining 17%, though the company outperformed its peers. Meanwhile, in Brazil, despite launching operations on the first day of regulation and posting 56% year-over-year pro forma growth, new taxation requirements and broader macroeconomic challenges negatively impacted profitability and outlook.
Bragg is targeting a 20% adjusted EBITDA margin in the second half of 2025, but Benchmark indicated that sustaining U.S. momentum while addressing challenges in the Netherlands and Brazil will be crucial for the company to reestablish a compelling growth profile. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with analyst price targets suggesting potential upside despite current market challenges.
In other recent news, Bragg Gaming Group reported its earnings for the second quarter of 2025, showing a mixed financial performance. The company achieved a revenue of €26.1 million, marking a 4.9% increase from the previous year. However, this figure fell short of the anticipated €31.37 million. Earnings per share were reported at -€0.07, slightly missing the forecast of -€0.06. In related developments, Citizens JMP adjusted its price target for Bragg Gaming Group to $4.00, down from $6.00. Despite the lowered target, the firm maintained a Market Outperform rating, highlighting Bragg’s shift toward higher-margin content as a positive factor. Proprietary content now accounts for 17% of total revenue, up from 9% since 2021. These recent developments reflect both challenges and strategic shifts within the company.
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