Bragg Gaming Group (NASDAQ:BRAG) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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Summary
Bragg Gaming Group reported Q2 2026 revenue of €22.9 million, a 12% decline year-over-year, while maintaining adjusted EBITDA at €3.5 million with a margin increase to 15.4%.
Strategic focus on cost reductions led to a 19% workforce reduction, aiming for €10.5 million in annual savings, to support profitability and EBITDA growth.
The company highlighted strong growth in proprietary content in North America, with a 44% increase in content revenue, and noted challenges in the Netherlands and Brazil due to market and regulatory changes.
Bragg Gaming completed the acquisition of Drayton International, aiming to enhance market access and expand content offerings, particularly in the U.S.
Guidance for 2026 was withdrawn due to integration efforts with Drayton, with an emphasis on optimizing the combined business for future growth.
Full Transcript
OPERATOR (Operator)
Hello everyone. Thank you for joining us and welcome to Bragg Gaming Group second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press Star one to raise your hand. To withdraw your question, press Star one again. I will now hand the conference over to Robbie Bressler, CFO. Please go ahead.
Robbie Bressler, CFO
Good morning everyone, and thank you for joining us for Bragg Gaming Group second quarter 2026 earnings call. If you are connected to our online webcast today, you should see our second quarter earnings presentation on your screen and you should have control to flip through the slides yourself as you listen to the call. If you are joining by telephone, please note that you can find our earnings presentation, as well as the financial results press release, on our website at investors.bragg.
Please note that certain statements on this call may constitute forward-looking information or future-oriented financial information. A full explanation of these risk factors is available on the second slide of the second quarter 2026 earnings presentation titled Forward-Looking Statements, as well as in the press release issued this morning and our public disclosures. Bragg disclaims any obligation, except as required by law, to update or revise any forward-looking statements, whether because of new information, future events or otherwise.
Any forward-looking statements made on this call speak only as of the date of this call. Bragg Gaming Group CEO Matteo Mazzi and myself, the CFO of Bragg Gaming Group, Robbie Bressler, will discuss the company's second quarter performance and provide a business update. We will follow that with a question and answer session. I would now like to turn the call over to Matt.
Matteo Mazzi, CEO
Thank you, and good morning everyone. Thank you for joining us for Bragg Gaming Group's second quarter 2026 earnings call. In the second quarter we prioritized margin and cash flow performance over aggressive revenue expansion, which underpins our renewed group-wide strategy. Revenue was 22.9 million euro, down 12% year over year. Adjusted EBITDA was held static at 3.5 million euro, and our adjusted EBITDA margin expanded to 15% from 13% in the same quarter last year.
On July 9, 2026 we announced a further reduction of approximately 19% of our global workforce, expected to deliver approximately 6 million euro in incremental annualized cash savings and bringing total expected annualized savings to approximately 10.5 million euro. Together with the restructuring announced on January 8, 2026, combined with the acceleration of our AI-first transformation, it leaves a leaner organization concentrated on our core technology, content and platform products, and it accelerates our path to cash profitability and adjusted EBITDA growth.
Furthermore, I would like to highlight our content performance across North America, especially in Canada and the United States. Our proprietary content being deployed by U.S. and Canadian operators is building very positive traction. This content revenue grew 44% compared to Q2 last year, driven by distribution, quantity and quality of content. Proprietary content is our most profitable product and the U.S. is the most important market for us, so seeing this level of growth is exciting and it underlines the growth strength of the content we build.
Against that, the Netherlands declined 14% year over year reflecting the anticipated rollout of legacy turnkey contracts following customer migration away from our PAM. Brazil was static as certain operators moved to direct supplier integrations, which moderated growth but improved the quality of the revenue we retained. Some other European markets were lower due to customer-specific factors and tightening local regulatory dynamics. Since quarter end we have also closed the acquisition of Drayton International and Matt Davy has joined us as non-executive chairman.
I will come back to both of those after Robbie takes you through the financials. Robbie, over to you.
Robbie Bressler, CFO
Thank you, Matt, and good morning everyone. All of the numbers I refer to have been rounded so they are approximate. Our reporting currency is euro and I will stay in euros on this call for the benefit of North American investors. We've provided a U.S. dollar equivalent conversion in our press release this morning. Second quarter revenue was 22.9 million euro, a decrease of 12% from 26.1 million euro in the second quarter of 2025. Gross profit was 11.8 million euro against 13.7 million euro in Q2 2025, with a gross margin of 51.7% compared to 52.7%.
Adjusted EBITDA was 3.5 million euro, static against 3.5 million euro in the second quarter of 2025, with the adjusted EBITDA margin expanding 212 basis points to 15.4% from 13.3% in the second quarter of 2025. We absorbed a 3.2 million euro reduction in revenue and delivered the same absolute adjusted EBITDA. As Matt mentioned, we have completed several restructuring programs and are starting to see the results of these measures. In the second quarter there was a 14% reduction in gross compensation costs prior to capitalization compared to Q2 2025.
Sequentially, revenue came down from 25.7 million euro in the first quarter of this year to 22.9 million euro in the second quarter of this year. Adjusted EBITDA margin was held broadly flat over the same period at 15.4% against 15.7%. Holding margin through a sequential revenue decline is proving the cost reduction measures are doing their work. For the six months ended June 30, 2026, revenue was 48.5 million euro, down 6% from 51.6 million euro in the first half of 2025.
Adjusted EBITDA for the half year was 7.5 million euro, flat against 7.5 million euro in the same period last year. Moving to the balance sheet, as of June 30, 2026, Bragg had cash of 3.3 million euro. Three items since quarter end are relevant to our capital structure. First, we completed the acquisition of Drayton International on July 22 for US$9 million, satisfied entirely in shares. Second, all 751,445 subscription receipts issued at US$1.73 converted into common shares and warrants on closing, releasing approximately 1.1 million euro to the company.
I would like to note that our Chief Operating Officer, two of our directors, Thomas Winter and Matt Davy, and myself subscribed in that private placement. Third, we renewed our revolving credit facility with Bank of Montreal for a further year on terms consistent with the existing arrangement. Turning to our outlook, as mentioned, we completed the acquisition of Drayton on July 22, 2026 and integration planning is underway. We previously disclosed fiscal 2026 revenue, adjusted EBITDA and adjusted EBITDA margin guidance, which was prepared in respect of our company's operations on a standalone basis.
With the integration of Drayton into our operations being at the planning stage, we don't have a reasonable basis on which to forecast the combined business for the remainder of the fiscal year. We are therefore withdrawing our previously disclosed 2026 guidance. Prior to the withdrawal and on a standalone basis excluding Drayton, we were tracking below the low end of our revenue guidance range and at the low end of our adjusted EBITDA range. However, we were tracking to the upper end of the implied adjusted EBITDA margin range provided.
Our focus is on integrating and optimizing the combined business, including aligning the product and technology roadmap, realizing identified efficiencies and establishing the go-forward operating model and cost base. And with that I will pass it back to Matt.
Matteo Mazzi, CEO
Thank you, Robbie. A few commercial highlights from the quarter: we signed a definitive agreement with 711, a leading Dutch and Belgian operator, to power its new Belgian online sportsbook, integrating Kambi's sportsbook supported with our Fuze engagement toolset. We supported Super Technologies' entry into the regulated Greek market through its Superbet brand with RGS and hub aggregation. The successful launch of our content with bet365 in the UK signals our effective penetration into key markets.
Additionally, when Alberta opened its regulated market, we launched on day one alongside an outstanding selection of leading operators, making more than 80 of our titles available to players throughout the province. Our strategic direction is unchanged: proprietary games first, AI-driven model, fewer low margin aggregation volumes and a move from being a supplier of components to being the architect of the ecosystem. Our operators run on Drayton advances that, and the point that matters most is reach.
It takes us into advance deposit wagering. Traditional iGaming is live in seven U.S. states. ADW is available in over 30. It also adds equity interest in five game development studios and three wholly owned technology and distribution platforms. On timing, integration work is underway across content and technology and it remains at an early stage. Before we go to questions, I would like to announce a change to our board. Don Robertson has resigned from the board, effective today.
I want to thank Don for his service and for his contribution to Bragg. Jordan Gnat will be joining the board in his place. Jordan brings over 30 years of expertise, serving as both an investor and an operator, over 20 of those in gaming and sports media. He's a co-founder and managing partner of Boardwalk Capital. Before that he founded and led Playmaker Capital, the digital sports media business he sold to Better Collective in 2024. He has also held senior roles at FOX Bet, The Stars Group and Scientific Games.
Jordan also participated in our recent private placement, so he's a shareholder as well as a director. His background strengthens the board and we're glad to have him. Robbie and I are now available to take any questions.
OPERATOR (Operator)
We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press Star one to raise your hand. To withdraw your question, press Star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q and A roster. Your first question comes from the line of Jordan Bender with Citizens.
Your line is open. Jordan, please go ahead.
Jordan Bender, Analyst at Citizens
Hey everyone, good morning, and thank you for the question. Robbie, maybe to start with you, just on the guidance that was withdrawn — you mentioned revenue and EBITDA may be trending below where it previously was. Can you just talk about the old business, if we want to call it that — where are you seeing some of that pressure? I guess we know Netherlands, there were previously going to be headwinds; I assume that was in the guidance. But where are you seeing some of the weakness outside of that?
And then maybe the second part of it — acknowledging you're not providing guidance looking forward — but now that Drayton is part of the business, can you maybe just talk more directionally how the growth, either revenue or EBITDA, of that business currently stands as we kind of think about the two businesses now together? Thank you.
Robbie Bressler, CFO
Sure. Thanks for the question, Jordan. On the first question, just to clarify, we were trending to below the low end of the range for revenue, but we are trending within the range for EBITDA, just at the low end of the range. So what we're seeing is more pressure on revenue, and with our cost‑cutting measures we've been able to keep our EBITDA margin within what we had thought the business would be performing at. In terms of what is driving the top‑line pressure, one thing to note in Brazil: when the market opened in Brazil, there were a lot of suppliers who were not set up to supply the market and we were able to be utilized as a vehicle for them to supply their content into the market. This has softened. A lot of these suppliers are now set up in a manner where they can go direct to operators rather than going through us. This is relatively low‑margin revenue, so it's not really having too much of a profound impact on our bottom line, but these headwinds are decreasing what we're seeing in terms of growth in Brazil. We've also seen some regulatory changes in different European jurisdictions, one being Croatia, which, you know, we have a good customer there and we were foreseeing a good strong year.
It has performed year over year, we're seeing good growth, but these regulatory changes that came in have proven to be much more impactful than previously thought. And these regulatory changes had to do with the way customers are acquired and advertising restrictions. So those are two fairly sizable headwinds that are hitting us. We've also seen a little bit of decrease in what's put out in our Wild Streak studio. Historically we've had a relationship where we've developed content on behalf of other providers or other studios who've done the distribution, and that has softened slightly.
So I point to those three things as being what has changed between us hitting within the guidance range and being slightly below.
Jordan Bender, Analyst at Citizens
Okay. And then any color on just kind of directionally how Drayton is growing.
Robbie Bressler, CFO
Yeah. So we are, you know, we're really in early days to be putting any real color behind what we expect Drayton to do in the next six months and beyond. Integration work is happening now. We completed the acquisition in good pace and we're really now focused on making sure that we can utilize the assets, integrate them as best we can, and have a very strong combined company. I'm not going to provide specific details where we think we'll be. Big reason why we made the decision to withdraw guidance, because we're not quite there in terms of being comfortable of what that forecast could look like.
One aspect of Drayton, which I think is a huge positive, but it is going to take us some time to get clear on directionally which way we'll go in the near term, is we have equity investments in five studios. So each studio is in itself its own business with its own trajectory and its own outlook. So we want to be very comfortable with each of those management teams, understand what is going to be at play in the next six months, but also make sure that we can utilize the assets we have at Bragg to enhance those results and really drive great group results.
So look forward to talking about it on future calls, but not going to put out anything yet.
Matteo Mazzi, CEO
If I may, if I may just add, Jordan. So Drayton obviously is an acquisition that's going to accelerate our growth through market access and margin expansion and tech efficiency. And through its ADW technology and partnerships, it's going to increase our addressable reach. Second, we added 100‑plus proprietary game titles and five studios, and that is in line with our strategies directly shifting our revenue mix towards higher‑margin in‑house IP. And finally, tech assets like their AI module fit seamlessly into our AI‑first framework or model, and it's reducing our unit cost of content creation and some other effects that that will have on our cost base.
Jordan Bender, Analyst at Citizens
Great, thank you. And me, just a quick follow‑up—this whole conversation, you just kind of—in the quote, pressure, it says will require real change.
Robbie Bressler, CFO
Jordan, I can't hear you.
Jordan Bender, Analyst at Citizens
You talked about.
Robbie Bressler, CFO
I don't know if it's your—I can't.
OPERATOR (Operator)
Jordan is breaking up. Yeah, why don't we go to the next and Jordan can rejoin the queue. Your next question comes from the line of Jack Vanderaarde with Maxim Group. Your line is open, Jack. Please go ahead.
Jack Vanderaarde, Analyst at Maxim Group
Okay, great. Good morning, guys. Congrats on the closing of the acquisition and thanks for taking my questions. Robbie, kind of just to follow up on some of the past comments and questions on the withdrawn revenue guidance. The prior revenue guidance, this excluded Drayton, but are there any new markets—maybe if I can—are there any new markets you entered or new catalysts, you know, that happened subsequent to providing that guidance that didn't maybe factor in?
For example, you entered the Alberta market in mid‑July. And any other developments maybe that weren't included or maybe they were factored in? Are these incremental to that prior withdrawn guidance, or is that something you don't want to comment on? Thanks.
Robbie Bressler, CFO
I mean, I'll comment on—Alberta was always in our plans. That was a launch and a strategic, important milestone for us to hit. We didn't ascribe a lot of growth in that market as it's relatively new. But we're quite excited what iGaming and iCasino especially is doing in North America across, you know, many jurisdictions. So we did point out in our press release that our underlying U.S. business—so this is the proprietary content we service both U.S. and Ontario and now Alberta—that's growing at a very good tick. We're well over 40% growth from quarter to quarter, Q2 to Q2, 2026 to 2025. So we're seeing growth in the areas we want to see and in the areas we've invested in, but we're not necessarily jumping to new markets. We want to be very strategic in any territorial expansion. So I wouldn't point to anything new that has come up. But what interests us the most is what's happening in the iCasino market in the U.S. and Canada. The continual growth of that market is extremely impressive. Just as a reminder, the projection on that market is 97 billion. This is just the U.S. market at maturity. It's only 12% regulated right now in terms of the whole U.S. population. There's so much more upside. And with the Drayton acquisition, we've really strengthened ourselves to be able to capitalize on that and quite excited about what can be achieved in that market.
Jack Vanderaarde, Analyst at Maxim Group
Okay, I appreciate the color there. And then maybe just a follow‑up on, I guess, the go‑forward gross margin and operating expenses on a quarterly basis and just how I interpret some of the language here. So obviously you're going to have incremental expenses, most likely from Drayton. But then you also made further—I think there was a July announcement where you made further restructuring, material restructuring, and cost cash savings of 6 million or so, or 10—I'm sorry, 10.5 million now altogether.
So I guess just you've done a good job, obviously, in the first half of this year. OPEX is down pretty big from last year. Gross margin did tick down a little bit in the second quarter. Just, I guess, with all these puts and takes now, how does the back of this year kind of compare to the back half last year on a gross margin and OPEX basis?
Robbie Bressler, CFO
Yeah, no, I appreciate the question. You know, I'm going to reserve comment just because, you know, we have withdrawn guidance and we want to come back with a clear understanding of what our combined business can do. I do think—I mean, I can say direction. I think the trends that we've seen are indicative of, you know, our current run rate of the legacy business. The gross margin for Q2 2026—you'll see in our investor deck—there were a couple of one‑off items that brought it down slightly, but if you factor those out, we're actually at about a 55%, 55.7% gross margin percentage, which is very much in line with where we've been and slightly better than prior quarters, which is showing the investment or the narrative that the more we move to proprietary content, the more we see our margins get better. So that is playing out. We had a couple of one‑off items that brought that down a bit, but if you look at our investor deck, it's illustrated to see what that gross margin percentage is, which is really indicative of our current business in terms of run rate.
Jack Vanderaarde, Analyst at Maxim Group
Okay, great. I appreciate all the color there, Robbie. I think that's it for me for now. I'll be back in a queue.
Robbie Bressler, CFO
Yep, thank you.
OPERATOR (Operator)
Your next question comes from the line of Mike Hickey with StoneX. Your line is open, Mike. Please go ahead.
Mike Hickey, Analyst at StoneX
Awesome. Thank you. Hey guys, good morning. Just maybe a clarification—I'm not sure if I heard this or not. A little perplexed on at least not giving guidance on the core, Robbie, just given that you just missed the quarter on revenue, and I'm not sure you clarified how you think revenue is going to trend on your core, but I think you would have visibility on that. So anything incremental would be helpful. And then when should we get—maybe talk about the complexities of Bragg and Drayton together that doesn't allow you the ability to give guidance on the new combined company.
Robbie Bressler, CFO
Sure. Thanks for the question, Mike. On your first question, just to clarify: we did provide comments of where we're trending on a standalone business, and those comments are looking for the rest of this year. So that's indicative where we see we were trending on a standalone basis. So we are giving color as to where the business is currently trending against our original guidance. And again, we're below our revenue range, but we're within the range from an EBITDA perspective, and actually from an EBITDA margin perspective we're trending to the upper end of the range which was implied when we gave guidance.
So hopefully that gives you some color as to where we are today from a legacy business point of view against our original guidance. In terms of the complexities—very good question, and I mentioned it a little bit in answering Jordan's call—but we effectively bought five different interests in five different studios along with wholly owned infrastructure as well that Drayton holds. We need to get clear understandings for what we think we can do as a combined business as we work with each of those studios and combine our assets with theirs.
We were able to move on Drayton at a fairly good pace, which was strategically important to us. But we want to be prudent with what we come back with in terms of expectations and felt like this is the best course of action at the time. We are excited and believe that there are quite good possibilities to see synergies—a little bit on the cost side but on the revenue side—in putting these assets together. So we want to make sure we have a clear, reasonable understanding to put out expectations on.
Mike Hickey, Analyst at StoneX
On your annualized cost savings, the 10.5, how much should we actually see here in '26 versus '27? What do you think needs to happen for Bragg to start to generate sustainable positive cash flow—free cash flow?
Robbie Bressler, CFO
Yeah, I mean we've done the work and we've taken out the cost. We're by no means done in terms of optimizing and seeing where more costs can come out. The savings are really going to start kicking in Q4 onwards. We did this quarter just to give some color. If you look at our gross compensation — so take out the one-time severance fees that we paid this quarter, and disregard what's capitalized and what's not in terms of compensation — if you look at our pure compensation number from this Q2 this year to Q2 last year, our compensation expenses are down 14%.
So we are seeing the savings, and there's lots more to go. We've got to get through these one-time severance payments, which we're going to have coming through the next couple months and then into Q4 and into 2027. The savings should really be showing through our numbers.
Mike Hickey, Analyst at StoneX
The last question from us, just thinking about milestones here in the next, call it, two or three quarters. What do you think sort of the biggest milestones that we should be looking at to sort of demonstrate that the restructuring and Drayton acquisition are starting to give you the benefits that, you know, you think they will, or basically that they're working?
Matteo Mazzi, CEO
Very good question. Our focus 100% is on the integration of the Drayton assets, most importantly in the U.S., or I should say North American, markets. That's where we're focused. That's where we see the value in Drayton coming together with our assets, and that's where we believe from a value point of view is most important for us to keep growing that business. And again, as mentioned, we saw some good percentage growth — 44% Q2 to Q2 — and even year to date and sequentially, quarter to quarter, we're seeing double-digit growth.
So that's our focus. Those are the milestones. That's the market that we want to keep conquering. And I really think we've taken the right steps here with bringing Drayton in. Us being able to align those two businesses to maximize value — that's the biggest milestone we're focused on.
Mike Hickey, Analyst at StoneX
That's great. Thank you, guys. Good luck.
Matteo Mazzi, CEO
Thanks, Mike.
OPERATOR (Operator)
We have reached the end of the Q&A session. I will now turn the call back to Matteo Mazzi, CEO, for closing remarks.
Matteo Mazzi, CEO
Thank you again, everyone, for joining our call today. We entered the second half of 2026 leaner, sharper, and with a clear games-first focus. Thank you for your interest and your continued support.
OPERATOR (Operator)
This concludes today's call. Thank you for attending. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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