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Bragg Gaming Group Inc (NASDAQ:BRAG) reported strong first-quarter 2025 results, highlighting significant margin expansion and profit growth driven by its strategic shift toward higher-margin proprietary content and continued U.S. market expansion.
Quarterly Performance Highlights
The gaming technology provider reported revenue of €25.5 million ($28.6 million) for Q1 2025, representing a 7.1% year-over-year increase. When excluding the Netherlands market contraction, revenue growth reached 27%, demonstrating strong performance in other regions.
Adjusted EBITDA rose 19.7% year-over-year to €4.1 million ($4.6 million), outpacing revenue growth and indicating improved operational leverage. The company also reported a 63.5% increase in cash from operations, which reached €4.5 million for the quarter.
As shown in the following financial overview, Bragg has maintained consistent growth in both revenue and Adjusted EBITDA over recent quarters:
Gross profit margin expanded significantly by 612 basis points to 56.0%, compared to 49.9% in Q1 2024. This improvement was primarily driven by the company’s strategic shift toward higher-margin proprietary content, which grew 62% year-over-year to €3.9 million.
Strategic Initiatives
Bragg’s product mix has evolved considerably over recent quarters, with proprietary content now representing a record 15.5% of total revenue in Q1 2025, up from 10.2% in Q1 2024. This shift has been a key driver of the company’s margin expansion.
The following chart illustrates how Bragg’s product mix has evolved toward higher-margin offerings:
The company’s proprietary content growth has been particularly impressive, as shown in this detailed breakdown:
Bragg has successfully reduced its reliance on the Netherlands market and lower-margin BetCity business. Revenue share from BetCity has dropped significantly from 42% in 2022 to an expected 16% in 2025, reducing concentration risk while improving overall margins.
The following chart demonstrates this strategic diversification:
U.S. and International Expansion
Bragg reported exceptional growth in the U.S. market, with a 150% year-over-year increase in revenue from its proprietary and exclusive online casino content. The company’s gross gaming revenue (GGR) from proprietary online casino content in the U.S. surged 338% year-over-year.
This growth comes amid a flourishing U.S. online casino market, which grew 25% year-over-year while the sports betting segment contracted by 8%. The U.S. online casino market is projected to reach $9.5 billion in 2025 and potentially grow to over $75 billion at maturity.
As illustrated in the following chart, Bragg’s growth in the U.S. market has significantly outpaced the overall market growth:
The company also launched operations in Brazil’s regulated iGaming market on January 1, 2025, establishing an exclusive partnership with and investment in Brazilian games studio RapidPlay. Brazil is projected to contribute up to 10% of Bragg’s revenue in 2025, with the market expected to grow from $1.5 billion currently to $3.7 billion by 2030.
Detailed Financial Analysis
Bragg’s financial performance reflects its strategic focus on higher-margin business segments. The company has organized its content portfolio into three categories with different margin profiles:
1. Aggregated Content (45% of revenue): Lowest margin
2. Exclusive Content (19% of revenue): Medium margin
3. Proprietary Content (15.5% of revenue): Highest margin
The remaining 20.5% comes from PAM & Turnkey solutions, which increased from 18.5% in Q1 2024.
The company highlighted that its current enterprise value of approximately $110 million represents a multiple of 5.0x EBITDA, which is significantly below the median multiple of 14.2x seen in peer exits in the gaming sector. This valuation gap suggests potential for share price appreciation if the company continues to execute on its growth strategy.
Forward-Looking Statements
Bragg maintained its full-year 2025 guidance, projecting revenue between €117.5-123.0 million (representing approximately 18% growth) and Adjusted EBITDA between €19.0-21.5 million (approximately 28% growth).
The company’s outlook remains positive, with continued growth expected from its high-margin proprietary content and expansion in key markets including the U.S. and Brazil. Management also noted a robust pipeline of opportunities that could potentially provide upside to the existing 2025 guidance.
Holly Gagnon was appointed Chair of the Board, having previously served as Lead Director. The company also reported it had repaid $5 million of a $7 million secured note and extended the remaining $2 million to June 2025, while finalizing a new credit facility with improved terms.
Bragg’s Q1 2025 results demonstrate that the company is successfully executing its strategy of shifting toward higher-margin proprietary content while expanding in high-growth markets like the U.S. and Brazil. The significant margin expansion and improved cash generation suggest the business model is gaining operational leverage as it scales, positioning the company for continued profitable growth.
Full presentation:
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