Earnings call transcript: High Roller Tech Q1 2025 sees revenue rise, net loss widens

High Roller Technologies reported a mixed financial performance for the first quarter of 2025, with revenue increasing by 4% year-over-year to $6.8 million, while the net loss widened to $3.3 million, or 39 cents per share. The company’s stock price dropped by 2.69% following the announcement, closing at $2.60. The gaming company is focusing on strategic market entries and product innovations to drive future growth.

Key Takeaways

• Revenue increased by 4% year-over-year to $6.8 million.
• Net loss rose to $3.3 million, with a loss per share of 39 cents.
• Stock price fell by 2.69% post-earnings announcement.
• Strategic focus on entering regulated markets such as Ontario and Alberta.
• Added 750 new games and 30,000 new active depositing customers.

Company Performance

High Roller Technologies, operating in the online gambling sector, reported a 4% increase in revenue for Q1 2025, though InvestingPro data shows a concerning 6.04% revenue decline over the last twelve months. The company experienced a significant increase in its net loss, up by 50% compared to the previous period. This was primarily due to a substantial increase in marketing spend, which rose by 50% to $4.1 million. Despite maintaining a healthy gross margin of 53.58%, the company’s overall financial health score is rated as WEAK by InvestingPro, with negative EBITDA of $5.75 million. The company is banking on its dual-brand strategy and market expansion to improve its financial standing.

Financial Highlights

• Revenue: $6.8 million, up 4% year-over-year.
• Gross Margin: 4.8%, an increase from 4.3% in the previous year.
• Net Loss: $3.3 million, a 50% increase from the previous period.
• Marketing Spend: $4.1 million, up 50% from the previous period.
• Cash Reserves: $4.5 million in corporate cash, $1 million in restricted cash.

Outlook & Guidance

High Roller Technologies is optimistic about its future prospects, particularly in the regulated markets of Ontario and Alberta, with the former being one of the largest globally. The company plans to enter the Ontario market in the second half of 2025 and is awaiting regulatory approval for Alberta. High Roller is also exploring the possibility of expanding into sports betting and expects improved cash flow and margins in the latter half of 2025. InvestingPro subscribers have access to 10+ additional exclusive insights about High Roller’s financial health and growth potential, along with comprehensive research reports that transform complex Wall Street data into actionable intelligence.

Executive Commentary

Seth Young, Corporate Strategy Lead, highlighted the significance of Ontario as a major regulated market, stating, "Ontario is one of the largest regulated markets in the world." CEO Ben Clemens expressed confidence in the company’s future, saying, "We’re excited about the future prospects."

Risks and Challenges

• Increasing net losses could strain financial resources.
• Heavy reliance on marketing spend may not yield expected returns.
• Regulatory hurdles in new market entries could delay growth plans.
• Intense competition in the online gambling industry.
• Potential economic downturns affecting consumer spending.

Q&A

During the earnings call, analysts focused on the company’s expansion strategy in regulated markets, with particular interest in the potential addition of sports betting to its portfolio. Management reassured stakeholders of their strong capital position and strategic focus on optimizing market entry and operations.

High Roller Technologies is positioning itself as a key player in the online gambling industry, leveraging its dual-brand strategy and strategic market expansions. While the company faces challenges, its focus on innovation and market penetration could pave the way for future growth.

Full transcript - High Roller Tech Inc (ROLR) Q1 2025:

Conference Moderator, High Roller Technologies: Good afternoon, everyone, and welcome to High Roller Technologies first quarter twenty twenty five Earnings Call. Before I turn the call over to the High Roller Technologies CEO, Ben Clemens, I’d like to remind you that this conference call will include forward looking statements within the meaning of U. S. Federal Security Laws with respect to future operations, financial results, events, trends and performance, which are based on management beliefs and assumptions as of today’s call or other specified date. Forward looking statements may involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements.

See High Roller’s financial results, press release and SEC filings for information regarding specific risks and uncertainties that could cause actual results to differ. Except as required by law, High Roller undertakes no obligation to update such forward looking statements. I will now pass it over to Ben Clemens. Please go ahead, sir.

Ben Clemens, CEO, High Roller Technologies: Thank you. Good afternoon, and thank you for joining us today. I will begin the call by providing a brief overview of our financial performance for the quarter. Following that, both Seth Young and I will focus on outlining our strategic direction in the future followed by a q and a. We have provided a presentation that you may access on our website at ir.hyrrollar.com, which we will reference on this call.

Starting with our financial overview, we are pleased to report that Hyrule delivered modest quarter on quarter revenue growth. So our operating loss increased as compared to the previous corresponding period. Our total revenue for the quarter was $6,800,000 with the gross one margin of 4.8%, representing respectively an approximately 4% growth revenue increase and 4.3 gross win margin increases compared to the same period of last year. Our net loss was approximately 3,300,000.0 with a net loss ratio of 39¢, 50 percent greater than the previous corresponding period. As of 03/31/2025, Degrees had 4,500,000.0 of corporate cash and $1,000,000 which is restricted.

Our overall loss this quarter was driven primarily by marketing overspend in the amount of approximately $4,100,000, largely in non growth territories. That’s been represented a 50% increase from the previous corresponding period and resulted in the less than attractive return on investment that we typically target. Within the quarter, we also commenced executing against the strategic organizational and operational realignment plan to focus exclusively on high potential regulated markets. While we expect the commencement of this plan to contribute to mitigated short term growth as we continue to wind down the remaining long growth markets, moving forward, this is also our expectation that the strategic shift will strengthen our stability and future proof our revenue streams. To assist with this transition, we implemented a strategic advisory board consisting of Donald Brantke and Robin Ridge.

Both of whom have taken active roles within the company during this transformational period. Daniel has been highly impactful working with our financial planning and analysis team, and Robin has immediately been impactful acting as interim CMO leading into q two. In q one, Seth Young joined our team to lead our corporate strategy and investor relations efforts, And we also added Emily McCallis as chief of staff, who is playing a pivotal role in managing the reorganization and optimization of our team. It is our expectation that cash flow and margin will increase in h two twenty twenty five commensurate with our ongoing exercises to reallocate capital to our growth market opportunities and ensure our organizational compensation is optimized for our launch into a select number of high upside territories. As part of our investment into products in q one, we added more than 750 new games, and I’m pleased to say 15 of which were exclusive first to market opportunities for High Roller, bringing our casino library to over 5,300 exciting games for more than 90 industry leading providers.

We also began working through a brand identity refresh and revitalization for both of our brands, Fuka and High Roller. This is anticipation of our regulated market expansion. In q one, we also added 30,000 new active depositing customers, representing a 34% increase from the previous corresponding period. And with that, I will hand you over to Stefan for an introduction and further commentary.

Seth Young, Corporate Strategy and Investor Relations Lead, High Roller Technologies: Thank you, Ben, and good afternoon. I’m absolutely thrilled to join such an experienced team, and I’m very, very excited about what the future holds for High Roller. As Ben mentioned, I’ve recently joined the leadership team. I’m bringing two decades of experience in the gaming industry to the table here, and I’ve worked on all sides and all ends of this table. So I have an intuitive understanding of the business, its operations, but really most importantly, its potential.

I’m looking forward to meeting and speaking with many of you that have joined this call today, and I’m highly confident that you’ll be as excited about this company’s future as I am. Let’s talk about that future. Within q one and continuing into q two, the company started the process of reshaping its operating profile to focus on regulated high potential markets, which is evidenced by the continuing shift in the geography of our revenue composition as compared to the previous corresponding period. This strategic plan is aimed at driving long term shareholder value, lowering our operating risk and costs, and putting the company in a position for scalable, sustainable revenue growth. To this end, Tideweller has identified the core markets of Finland, Ontario, and Alberta as select opportunities of focus.

Let’s start with Ontario. I’m thrilled to confirm that High Roller has submitted its initial licensing application to Ontario, and, directionally, we are preparing to launch in the second half of this year, such as licensing and regulatory approval. Why Ontario? Well, Ontario is one of the largest regulated markets in the world as measured by gross gaming revenue. It’s actually the sixth largest, and the market is still in its infancy.

Over the first three years of the market’s lifetime, Ontario has outperformed all other regulated online gambling markets in North America, driving over $5,000,000,000 US in revenue since inception with a current total addressable market opportunity of nearly 2 and a half billion US dollars annually with continued future growth expected. Ontario is a competitive market, but we are experienced operating in competitive markets. And an operator doesn’t have to be the number one market leader to run a strong profitable business. With a total addressable market opportunity of 2 and a half billion dollars, a 5% market share is roughly a 125,000,000 top line business that’s strong. That’s an excellent segue to Alberta.

Just last week, the Alberta provincial legislature passed bill 48, which will establish a framework for the licensing and regulation of online gaming operators and suppliers in a very similar way as Ontario. The bill is now pending royal assent, and this is ceremonial for the process to confirm the bill into law, and that is expected. Part of our rationale in focusing towards Ontario was that it would be a strong anchor for future expansion in Canada and wider North America. So we’re thrilled to see Alberta adopting a framework that should be quite similar to Ontario’s. Subject to enabling legislation and regulatory approval, I will will be seeking a license in Alberta.

Now moving across the North over to Europe, I’d like to focus your attention to Finland, a market where our team has tremendous experience and it currently comprises 60% of our net gaming revenue. Finland is in the process of moving from a monopoly operated market to an open license competitive regulated market profile. Given our experience, it’s an excellent upside opportunity for High Roller, and we will pursue licensure as soon as it is available. Focusing on these three markets really plays core strengths as an organization. The markets are comprised of educated consumers.

They’re all moving to a regulated profile after having large unregulated markets, and the markets feature similar user behavior and product interests, and they also rank amongst the highest in terms of customer engagement and customer value in the world. And interestingly, casino led brands like High Roller that operate in sports first markets have a track record of success. Casino led brands typically target a different type of consumer and sports led brands, and our relationship with SpikeUp Media has tremendous experience in online casino customer acquisition will put us in pole position to excel. Now passing it back over to Ben to cover the affiliate portion of our business, Casino Room. Ben?

Ben Clemens, CEO, High Roller Technologies: Thank you, Seth. In q one, our affiliate brand Casino Room contributed nearly $1,600,000 in revenue. We will continue to maintain an affiliate only model for Casino Room in emerging and non core markets as this property allows for the generation of revenue and markets that our casino brands may not operate indirectly. This expands our reach while minimizing overhead and regulatory exposure and also complements our core strategy while providing optionality for the future.

Seth Young, Corporate Strategy and Investor Relations Lead, High Roller Technologies: Now at this stage, I’d like to reintroduce you to our brand, High Roller. We’re making some fairly significant changes, and we hope you find it as compelling as we do. We’re excited. In general, online gambling companies are somewhat commoditized now. There are a lot of them.

But High Roller sets itself apart from the rest in a few ways. First, our VIP branding is absolutely incredible, And we expect in time for the High Roller brand to be recognized as one of the highest end brands in the market, catering both to the upmarket consumer and the casual consumer base. Alongside High Roller, we have the super fun, super playful fruit top brand, we can run a dual brand strategy which gives us interesting options in the market. Secondly, we’re a total pure play in the capital markets. There aren’t many online consumer brands out there that are publicly listed, and that makes us very interesting.

We’re founded and operated by a team that, very simply put, has been there before. It’s made up of super sharp industry veterans that really know the ins and outs of the space and how to operate. Many of us are also active as early stage investors in the gambling market, and this connectivity and visibility across the market gives us an interesting unique advantage relative to introducing new and innovative product before anyone else among many other advantages. Given the early stage of this business, team is so so important, and this, for me, is one of the many, many reasons I was drawn to High Roller and why I’m so excited. Our relationship with Spike Up really is a game changer.

Spike Up Media is one of the most experienced lead generation and customer acquisition companies in the space, and we have the distinct benefit of leveraging that experience and their proprietary technology to drive significant return on ad spend. And perhaps they’re really a bit of a secret sauce. SpikeUp has driven more than $600,000,000 in player deposits and spent over $150,000,000 on marketing to get there during their fifteen years of existence. We have the benefit of leveraging their in house creative team, their influencer network, and their proprietary technology in the interest of driving lower cost per acquisition and higher return than industry standard. Lastly, I really want to highlight this incredible team starting with our board of directors.

They cover off strong experience in public market governance, and they have subject matter expertise in core areas of our operation. Of our chairman, Michael Kubari, and Brandon Eckhaus are directors of Spike Up Media, the leading iGaming marketing company that I just mentioned. Daniel Bradke is a prolific entrepreneur in the gaming industry with nearly two decades of experience as a founder and an operator. Kristen Britt is currently the vice president of people and culture at Anaxy, which is subsidiary of Aristocrat Gaming, and she previously held leadership roles at both Hard Rock Digital and Churchill Downs. Dionis Martinson is a strategic adviser at Mojang Studios.

You may know them as the creators of Minecraft, where he previously held the role of CEO. He’s also the cofounder of Happy Socks and mobilebet.com, and he has previously served on the boards of publicly listed companies, Finnair and XO Media traded on Nasdaq. Rounding out our impressive board is David Weil. David is the former vice chairman of Nasdaq and former president of Prudential Financial. David is the founder, chairman, and CEO of the investment banking firm, Real Capital.

He previously served on the boards of publicly listed companies, PAVmed, BioSig Technologies, and Helium. And in addition to High Roller, he currently serves on the boards of Scopus, BioPharma, Inc, and Ameritas. We’d also like to highlight two key advisers to our business. First being Jeff Smith, who brings twenty five years of digital marketing experience to High Roller. He has built marketing agencies, he built platforms, and he’s built brands that have reached hundreds and millions of people.

It’ll be very interesting for us in his advisory capacity as we continue to scale. And Robin Reed, who I previously mentioned, brings over twenty years of experience in iGaming to High Roller, and Robin has held leadership roles in both public and private companies over the tenure of his impressive career. Notably, Robin was inducted into the iGaming Hall of Fame in 2019 for his accomplishments, which is exciting. Last but not least, our key executive leadership team is led by Ben Clements, who brings two decades of experience in the iGaming industry and regulated markets for the company. Prior to High Roar, among other leadership roles, Ben was the cofounder of the publicly traded Gaming Innovation Group and served as the managing director for platform unit.

On behalf of the entire High Roller Technologies team, I wanna thank you for taking the time to join our call today, and we’ll now open the floor for some q and a.

Conference Moderator, High Roller Technologies: Thank you. We will now be conducting a question and answer session. Queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

One moment, please, while we poll for questions. Our first question comes from Richard Cedrone with RPC Consultants. Please proceed with your question.

Ben Clemens, CEO, High Roller Technologies: Yes. Thank you. I have a couple of questions, if you don’t mind. How do you see the total expansion for High Roller outside the markets already mentioned, the future expansion? Richard, nice to meet you, and thanks for the question.

A great one. Yeah. Outside of the, you know, the markets that we’re we’ve mentioned on the call, we’re excited about the future market expansion. You know, between the connections we have in the industry with regards to, you know, knowing about markets that are moving especially for towards the regulated sort of future. In addition to the partnership that we have with SpikeUp Media who has been sending traffic to multiple markets, you know, thousands of players to hundreds of casinos and multiple jurisdictions across the world over the years.

You know, we have a lot of data inside into these markets as well, which really gives us the the advantage of being able to make strong strategic decisions, you know, ahead of the market entry with regards to the player values and the opportunity that High Roller would have in those markets. Does that answer your question? Yes. It does. And then second, will you add are you gonna add sports to this design?

That’d a great question. Yes. I mean, we’re primarily we are a casino first led brand. With the technology that we have in place and the relationships that we have, we can hold on sports books. It’s quite an easy addition to add, you know, a secondary revenue stream.

Again, we’re primarily a casino brand. So as we move into these regulated markets and we see the advantage of adding sports as a secondary offering, we will we will be sure to do so. We’re about the the fact. You know, it’s a it’s a great additional product in in many of the markets that we’re looking to go into, Ontario in particular. Sportsbook is a is a great acquisition channel that we’ll be excited to add in the future when it when it becomes relevant for us.

And I just have one last question. On the call, you mentioned the organizational operation agreement plan. What has been the impact on that so far? Yeah. So in the the q four annual report, we we announced the sort of the strategic initiatives that we have for the optimization.

We’re already seeing the fruits of that labor coming through end of q one into q two. So, you know, we’re excited about how how the strategic review is is going and, you know, the optimization, the, you know, strategic focus that we have now as an organization. We’re really excited about, you know, moving into Ontario, the future regulation of both Finland and Alberta. So we couldn’t be actually be more excited about the future and the future prospect for prospective growth for high level technologies. Great.

Thank you so much for your answer. I’m all done. Thank you. Thank you, Richard.

Conference Moderator, High Roller Technologies: As a reminder, if you’d like to ask a question, please press star one on your Our next question comes from Steve Schneeberger with Stroubridge Investments. Please proceed with your question.

Seth Young, Corporate Strategy and Investor Relations Lead, High Roller Technologies: Hey, guys. Maybe I missed it on the q four call. You know, I thought the premise going into the roadshow for the IPO was raising capital. You guys have your models all refined. All the games refined.

You know your marketing. You put in x dollars of marketing spend, and it was supposed to leverage into, you know, consequential revenue and, you know, obviously, income. What’s gone wrong in the last couple of months? I mean, it seems like you’re already strategically aligned with new plans, things are changing, you know, you’re losing more money. What happened to that premise?

Ben Clemens, CEO, High Roller Technologies: Yeah. Great question, Steve. You know, we we have the organization in place. We have the the marketing channel set up. Over over q one, we haven’t too far of the spread of the, you know, the marketing reach.

We concentrated on sort of five different markets. And, you know, we’re waiting to really go heavily into the to the regulated markets, which are, you know, now in progress. We have more insight into some of them regulating, you know, go through the regulatory process twenty fifth. And also with the progress the process going into Ontario. So now, you know, we’re strategically focused on, you know, the entry in those markets getting into Ontario and q two.

And also really exploiting the partnerships that we have with, you know, with Spica Media, incredibly impressive in in this regulated market space. And, you know, also, that’s just into fully regulated revenue, you know, more protectionism going forward on less risk of, you know, market closures and, you know, things like that.

Seth Young, Corporate Strategy and Investor Relations Lead, High Roller Technologies: And then, you know, looking at your capital, obviously, as as, you know, you’ve taken a loss and everything takes time to realign and you got the going concern, do you expect your current capital to be able to carry you through this, or you’re gonna have to do another capital raise, you know, to get you through the year?

Ben Clemens, CEO, High Roller Technologies: No. We expect our capital to get us through this and then get us into Ontario into the through the regulated markets. We don’t foresee a a capital raise in any time can you anytime soon. We have greater cash flow expected for h two, so we feel comfortable with our position.

Seth Young, Corporate Strategy and Investor Relations Lead, High Roller Technologies: K. Thank you. You’re welcome.

Conference Moderator, High Roller Technologies: There are no further questions at this time. I would now like to turn the floor back over to Ben Clemens for closing comments.

Ben Clemens, CEO, High Roller Technologies: Thank you. Thank you, Maria. And thank you everybody for joining today. Again, really good to have you here, and we’re incredibly excited about the future. We’re excited about the, you know, the future prospects with going into Ontario and h two.

Incredibly excited about, you know, the organizational restructure and the optimization to be able to go into those markets, localization, and really exploiting, you know, the partnerships that we have with PsychUp Media and also with regards to localization into these markets. It’s it’s a really bright future, and thank you for your time. If there’s no questions, then I wish everybody a good afternoon and good evening.

Conference Moderator, High Roller Technologies: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.

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