Q4 2023 Bragg Gaming Group Inc Earnings Call
[music].
Hello, and welcome to the break gaming group 2023 fourth quarter and full year earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session and if you would like to ask a question simply press Star One I will now turn the conference over to your needs.
Baird Chief strategy Officer. Please go ahead.
Thank you operator, good morning, everyone and thank you for joining our fourth quarter and fiscal year 'twenty earnings call Michael how many.
Baird: Gilbert Chief strategy Officer, who will be hosting today's call along fine I'll call him a lot.
Oh, well I mentioned.
Fourth quarter and fiscal year 'twenty three.
<unk> our CFO.
Our fourth quarter and fiscal year 'twenty three results. If you have not already done. So you can follow our earnings call presentation from our website.
There's also been asking wolfberry wallboard, Walt Cooper and his section called latest presentation on the call well review the financial and operating results for the fourth quarter and fiscal year 2023. Following our prepared remarks, we'll open the conference call to a question that also theory.
Third the call with some brief cautionary remarks regarding certain statements made on this call certain statements made on this conference call and I was born.
Questions may constitute forward looking information or future oriented financial information.
Meaning of applicable securities laws statements about expected growth respective results.
Outlook in financial and operational expectation Attunity projection rely on a number of assumptions concerning future events, including market and economic conditions. This is Paul that's all opportunities future plans and strategies, there's a logical development and anticipated events.
Regulatory changes that may affect the corporation and its subsidiaries and their respective coupled with an industry.
While we believe these assumptions to be reasonable they are subject to a number of risks uncertainties and other factors many of which are outside the company's control, which would cause the actual results performance or achievement of the company to be materially different it.
There can be no assurances that these assumptions or estimates are accurate with any of these expectations.
Expectations will prove accurate broke complete discussion on shopko. Please refer to our recently filed the press release and other publicly available disclosures.
Baird: With that behind Us I'd like to turn the call to our CEO Mark <unk>.
Mark: Good morning, everyone. My name is not there smartly.
Chairman and CEO Rod.
I'm going to run through a company overview and key operational highlights from the full year of 2023 as well as from the fourth quarter.
Then I'll pass the line over to Vernon <unk>, our CFO, who will go through the financials.
Following that I'm going to talk more about some of the strategic and operational points that I want to focus on.
Vernon: Before wrapping up with our outlook and summary, and then we'll open up the call up to your questions.
The first slide shows a snapshot of who Bragg is.
We are a multi award winning global supplier of casino games technology and services to the fast growing gaming industry.
As Ronen will show in the financials 2023 was another year of growth.
But more than that.
<unk> has gone through a transformational year.
Last summer, we restructured the board of directors and in August I rejoined the company as CEO.
Then we have been busy implementing a series of strategic and organizational changes.
All with the aim of aligning shareholders' expectations with company operations and unlocking shareholder value.
I'm going to talk more about strategy later in this presentation.
First let's turn to slide five to take a look at some key operational highlights from the full year of 'twenty three.
And from the fourth quarter.
During the year, we signed global tier one agreements with vets and eight day they'd William Hill and Pokerstars.
And we continued to expand our content distribution network by entering new markets, including Belgium.
Italy and Mexico.
In each case launching with the local market leaders.
We also continued our content rollout in multiple north American gaming market, including with several operators in New Jersey, Michigan, Pennsylvania and Connecticut.
Our exclusive call them portfolio continues to resonate well and we have seen a particularly positive trends with this content in North America from the fourth quarter onwards.
Meanwhile, we also continued to build our content business and the international I gave me market such as the United Kingdom, Spain.
Spain and Switzerland.
In the fourth quarter.
We were pleased to launch with Superbad in Brazil.
Vernon: With our proprietary content.
As well as with casino aggregation and our fuse player engagement platform.
During the quarter, we expanded the distribution reach of our newest gains in technology in New Jersey with our latest launch.
<unk> G M.
And we were pleased to announce in the fourth quarter that we successfully negotiated our time extension agreement with Betsy D in the Netherlands, including continued content and product delivery.
After one has taken you through the financial results I will come back to talk more about our strategic progress in recent months.
Vernon.
Thank you, Matt and good morning, everyone.
I'll begin my comments on slide seven.
As Matt indicated earlier the full year of 2023 marked another positive step in our expansion journey.
We continue to execute against our mission our strategic plan as was reflected in our financial and operational results.
In the fourth quarter total revenue went down by one 4% year over year to $23 4 million euros, reflecting revised commercial terms.
With one of our key strategic partners agreed during the quarter.
Full year total revenue was up by 10, 4%, reaching $93 5 million euros, continuing our growth momentum since the financial year 2021.
The growth was mainly derived organically through our existing customer base launching financially 2021, and 2022 in particular, the Pam and turnkey solution customers in the Netherlands.
With content offering and a solid revenue performance from the wells to gaming studio customers.
From an operational Kpis perspective, total wagering generated by games and content offered by the groups. During the quarter was up by 18, 1% to $6 1 billion versus $5 1 billion euros in the same period last year.
On a full year basis total wages were up by 26, 6% to $22 4 billion. This is $17 7 billion.
Previous year.
As you can see from the Wagering chart on the right hand side Brexit ongoing positive momentum from the fourth quarter of 2021, which demonstrate engagement of our customers and users to the content, we're delivering from a proprietary exclusive and aggregated third Party studios.
Vernon: Gross profit for the quarter decreased by seven 3% to 12 million euros with gross profit margin decreased to 51, 5%.
The full year 2023 gross profit increased by 10, 8% to 49 point not one 9 million euros with margin raise into 53, 4%.
Vernon: The full year 2023 gross profit improvement is primarily the result of increased revenue performance in all content products, while recording slightly lower Cam and managed services revenue.
Adjusted EBITDA for the quarter was down 23, 7% to $2 8 million euros with adjusted EBITDA margin, reaching 11, 9%.
While the full year 2023, adjusted EBITDA, so growth of 26 months, 3% to $15 2 million euros with improved margin to 16, 3%.
The yearly change in adjusted EBITDA margin is mainly as a result of scaling revenue, while maintaining control investment in salaries and subcontractors and other operational costs as part of the company's strategy to extend software development product and senior management functions.
As of 30 <unk> of December 2023, cash balance ended at $8 8 million euros with a positive net working capital position.
<unk> provided an update on its expectations for 2020 full full year revenue and adjusted EBITDA growth with revenue expected to rise nine 1% to 66% to a range of 100 into 209 million euros and adjusted EBITDA expected to increase up to 21, 7% to a range.
15% to $18 5 million euros, the mid points of the 2020 for revenue and adjusted EBITDA guidance ranges represent growth of 12, 8% and 10, 9% respectively over the reported full year 2023 revenue and adjusted EBITDA.
Vernon: We continue to execute against our mission and strategic plan, we are scaling up our business in line with both our revenue growth and continued movement in product mix as indicated in the right hand side of this slide.
Full year gross profit increased by 10, 8% to $49 9 million euros with margin raising.
By 20 basis points to 53, 4%.
The fourth quarter has seen a decline both in gross profit to seven 3% to 12 million euros and margin dropped to 51, 5% due to revised commercial terms with our key strategic partner that has been reflected in the quarter and it's mainly related to managed services and aggregation Kodak.
In the fourth quarter total games and content revenue segment amounted to $18 2 million euros and represented 77, 8% of the total revenue, which is comparing to fourth quarter last year with the content revenue segment amounted to 80 million euros and represented 7% to 6%.
Vernon: Proprietary content deploy with this positive progress in Boston, the U S and EU market by increasing both distribution and games performance constantly.
As indicated in the previous quarters Bragg is expecting an improvement in gross profit margin to take place in financial year, 2020, fives by Chris and get higher margin revenues coming from proprietary content, Pam and turnkey solutions.
Moving to slide nine full year adjusted EBITDA amounted to 52 million euros against an operating loss of 0.8 million. The GAAP was driven by the following noncash exceptional items.
Appreciate and amortization the increase in intangible amortization as part of this thing games acquisition in June 2022 increased level of investment in software development and a change in the useful life of customer relationships.
Sure. This payment the charge for awards granted during the period composed of the issues and our Skus and options during the period, a one off charge of <unk> 4 million euros relating to discontinued contracted relationship with the employee was incurred.
Exceptional costs is mainly associated with the discontinued contracted relationship of employee in the total value of $1 3 million.
And again, a remeasurement of deferred consideration mainly associated with the acquisition spin games in June 2022 on the total outstanding deferred liability that was adjusted to reflect the changes in current fair value.
Moving to slide 10, as Youll see on the slide we ended the fourth quarter with a cash balance of $8 8 million euros compared to $11 3 million euros as of December 31, 2022, with outstanding liability of $4 million of convertible security.
Vernon: Post quarter end.
The company made cash repayment of half a million dollars and 1 million U S. Dollar settled through issuance of common shares, leaving outstanding balance as of today to put $5 million. We expect to continue exercising the right to pay down the existing convertible security subject to ongoing management assessments.
Net working capital at the end of December 2020, we ended at $5 1 million euros, which is excluding deferred consideration of convertible debt, which compared to the $6 6 million euros at the beginning of the year.
From a cash flow perspective, the full year financial year ended December 2023.
A total of $11 7 million euros generated from operating activities with underlying performance, reaching to 36 million euros offset by the movement in working capital and income taxes of $1 9 million euros.
A total of $9 7 million euros invest in intangible assets, mainly related to the capitalization of software development costs.
So a total value of $8 7 million euros, and 0.6 million euros to the other intangible assets during the period.
And at a total of $4 2 million euros used in financing activity, which has been domains. It related to the repayment of loans in relation to the convertible security to a total of three 7 million euros.
Looking forward management is projecting positive free cash flow from operations, while theres, no capex or technology depth required in the business.
With that I will hand over the call back to Matt to continue with commentary on strategy and operation.
Thank you ronen.
In the fourth quarter and full year of 2023, we have accelerated content development.
And the release of proprietary and exclusive content, achieving a critical mass of games.
We have introduced branded and custom product categories.
And we have successfully established our builds on existing relationships with third party channels of content providers.
Such as downloads blueberry and incredible technologies, but we're <unk>.
Seeing growth in the distribution of all of our content in regional markets throughout the U S, Canada, Latam and Europe.
We have also started monetizing new opportunities with fuse for I gaming.
As for sports betting.
Thank you for lotteries.
Producing new features and new functionality to the platform such as an AI powered recommendation engine.
And highly customizable jackpot standards to operators brands and user base.
Driving incremental revenue for both the operator and Brian.
We expect to generate meaningful recurring revenue alongside our obligation.
Exclusive content.
And managed services.
We have successfully developed a commercial plan to grow revenue outside of the Netherlands.
And we'll continue to diversify away from potential over exposure to that.
<unk> market through growing revenue in other high value markets, such as Brazil, Belgium.
In Canada.
The uncertainty with Betsy D that was hanging over Bragg has been resolved.
And we've signed an extension of the <unk> agreement and also agreed a new framework agreement for distribution of.
Our proprietary and exclusive content in a number of local regulated markets for various in pain brands.
Following the changes last summer at the board level, we initially focused on organization structure and processes.
And that started executing against new organizational improvements.
We have successfully resolved critical vacancies in the HR.
Legal and U S and EU commercial departments.
Vernon: And we'll continue to add expertise and talent to build the best teams in the business.
In order to execute against our strategy.
We have also implemented refined strategies for the U S and Canada.
Vernon: While we initially only focused on proprietary and exclusive third party content.
And now we're also focused on aggregation and fuse platforms in both U S and Canada.
And we are seeing especially strong interest in Hughes in both of these markets.
I will talk about further strategic initiatives later in this presentation.
Moving to slide 13.
Want to reiterate the key pillars that we have put in place to continue to drive revenue growth.
Vernon: Improve our profit margins and generate value for our shareholders.
We are focused on our proprietary and exclusive games roadmap.
We have successfully scaled up production launching 69, new exclusive items in 2023.
Both from our own in House Studios.
And from in demand suppliers, such as blueberry.
Incredible technologies.
Sega Stymie creation.
Vernon: Mark and others.
With our ever expanding games portfolio, we are building brand recognition in North America.
Europe and Latam.
And we're leveraging our game production capacity to offer increasing numbers of operator exclusive custom and disposal gains.
Most recently, we launched boardwalk slot bankers in cash.
Vernon: Our second constant title policies as pilots in Michigan.
And New Jersey.
Furthermore, we are focusing on regulated market distribution growth.
With tier one and tier two operators remaining a key strategic pillar for us.
Allowing us to leverage our content portfolio by expanding its reach to more players worldwide.
And in turn we can offer scale in multiple regulated markets for these operators.
We still see plenty of upside in large regulated markets such as U S.
Vernon: Okay.
Italy and others.
Where we have plenty of space to launch with new operators.
And to grow our share of wallet with existing ones.
And we're very well prepared for markets that are currently going through regulatory reforms in Latin America.
Such as Brazil, Peru, and Mexico.
And in Europe, where we see potential for growth in countries pending regulations.
Or are expected to further regulate such as Finland.
In Germany.
Our promotional engagement and player journey platform fuse offers a differentiated product proposition.
Vernon: And remains central to our strategy for growth both on content.
Content delivery and Pam fronts.
We believe that juice is a platform that is unique in the market as it works on a standalone basis.
Or as a part of proprietary content and third party exclusive content portfolio.
Aggregated content and sports betting portfolio.
Pam.
Juice is easy to use.
Allowing operators to launch multiple realtime cross product and cross channel engagement campaigns that are designed to significantly increase the most important kpis.
Such as lifetime value conversion rates and retention rates.
We feel that we are in a perfect position to leverage the capabilities of this platform to allow operators to create differentiated b to C pulse.
We have already rolled out shoes with selected T Pam and aggregation customers and.
And we aim to license to use as a standalone product in the U S, Canada, Latam and Europe.
In addition to that we're in a very good position to cross sell.
And up sell all of <unk> products, such as aggregation Pam and managed services.
Vernon: On the back of this opportunity as well as increased interest in our combination of aggregation infuse tool set for sports books.
We're creating new partnerships with sports betting platforms.
To create compelling new turnkey propositions.
We're also going to continue to refine our products and explore new segments, such as I lottery.
And social moving forward.
Vernon: Lastly, our focus on recurring profitability expansion means that we aim to deliver a culture of continuous improvement and we're going to leverage opportunities to introduce product development automation and introduce product features that will allow our customers to further automate processes and become more efficient.
We are implementing strict cost control measures and will seek to expand profit pools and profit margins all with the name of maximizing shareholder value.
On this slide.
I want to highlight that our broad offering of content.
Technology and services enables us to deliver custom solutions for our customers and different types of regulated <unk> gaming market environment internationally.
Our full turnkey solution powered by the Bragg, Pam and Bragg hub.
The content aggregation and delivery platform.
Lead the markets in the Netherlands, where we showed that by being fast to adapt and set a bar technology and newly regulated markets.
We can gain first mover advantage will become the go to local market experts.
Vernon: Our Pam business is also making strides in the Czech Republic, and we are ready to offer our customers highly.
Customized vitamin therapy solutions in regulated and newly regulated markets, where the right opportunities arise.
At the core of our technology offering as Brian hub.
Vernon: Content aggregation and delivery platform with over 9000 online casino games from all the top suppliers available through a single integration.
Our aggregated portfolio is constantly updated with new games providers and the latest games with no extra work for our customers and it all comes with our cutting edge fuse engagement tools as the standards.
The combination of a huge library of regularly updated games, along with player engagement and experience enhancing features.
Is a powerful proposition in the U S and Canada, and especially a newly regulated markets like Brazil, where we recently launched our aggregation offering with supervision.
While in Peru, where.
Where we recently became an approved supplier.
Our localized options are in high demand.
We also see strong demand from businesses such as state run lotteries looking to upgrade their interactive operating with the latest <unk> content.
And promotional engagement and player experience features.
Or there I lottery casino and sports book verticals.
Lastly, and I'll talk more about this on the next slides.
We are proud that in the last couple of years, we have ramped up our exclusive content offerings.
Gains built on our proprietary rgs.
In 2021, we kicked off our proprietary content journey with.
With the acquisition of Wall Street gaming, which provided an instant springboard.
In growing our creative portfolio mix with investing in technology and development teams.
We began to rollout the internal content in 2022 under.
Vernon: Under the accounting slot loved brands.
Vernon: Based in Las Vegas.
Vernon: And at the same time grew our European design team to kickoff integral magic launches.
These investments began to produce a significant number of games in 2023 with 29 games release.
More importantly, we have seen many of these internal titles performed well across various new markets, where we are actively adding customers.
Including in the U K, Italy, Mexico, and Greater Latin America.
We continue to grow and refine our content and commercial teams and processes, leading to an exciting portfolio.
In 2024, entering several new product categories.
Also very important is the studio partnerships, we have with variety of companies, which we also expanded.
We're introducing 2023.
Vernon: Launching titles for blueberries, such as double lock with proven impactful in both European and North American markets.
We expanded our partnership and increase the amount of releases from both incredible technologies and will pass.
Along with introducing our first titles with King showed gains in Vegas time equation in Europe.
Both of which are being actively rolled out or in submission for the American market.
Vernon: <unk> with its European Heritage has proven valuable.
Vernon: As we grew our relationships in markets, such as Switzerland last year.
The U S I gaming landscape.
Is incredibly exciting and constantly involving.
We have a strong focus on the region and North America continues to be a.
Key growth market for us.
We have faced a few challenges as multiple operators have changed our Pam platform, leading to delays with certain key customers and markets. While we continue to work through integrations.
Opening up our distribution further with several new planned launches over the coming months.
Our North American strategy continues to be well received.
By operators of <unk> value proposition in the market.
With content that is recognized by player from variety of partners from incredible technologies to blueberry, Sega sand creation cooking.
Bookings show gains and our internal studios would produce some recognizable land based <unk>.
And resonate well with players and operators in the U S as well as Canada.
The chart on the right hand side of this page highlights the momentum we are starting to see in North American markets with the Bragg Rgs.
Rollout of new games from internal studios as well as from our partners are contributing to our growth here and as we continue to launch games. We're building a baseline revenue stream, which continues to incrementally grow over the long term.
Our growth potential remains significant.
We are live with our newest games with one operator in Pennsylvania.
But several integrations are in process in late stages of testing.
This is very important market as we can see the results from our historical spin rvs content.
We have multiple customers in New Jersey with go live dates later this year.
And filling out the Michigan market operators, ensuring we can go live with both standard online games as well as mobile iOS apps.
We expect the Delaware will be online for US later this year.
We also expect 2024 will bring meaningful growth in the Canadian markets.
There are multiple key operators, who still rollout of gains within Ontario.
But equally exciting are the other Canada online partnerships in progress.
We expect to be live in two additional Canadian provinces. This year.
And this will lay the foundation for an efforts to seize as many opportunities in the Canadian market.
Possible and significantly expand our footprint.
We remain bullish in our near term growth opportunities in North America.
And while no new markets are expected to open near term are upsides in the existing markets is substantial particularly as we look at expanding our content portfolio.
<unk> expanded its content portfolio significantly in 2023, but in 2024, we will build on that momentum in multiple ways through key product strategies and capabilities.
Understanding the data and building the right content for the right market and for the right segment is a critical part of this in our strategy of having localized and custom content in North America is proving its value.
2023 marked our first custom game with Jesus with an additional rollout already this year.
Vernon: But we have multiple operators in Europe, where customization is providing unique opportunities to boost performance.
Strengthen our relationships and gain position.
2024, we'll also see our first brand extension opportunities from our internal content teams.
We will build multiple brands extensions to Dragon Powell.
Very popular game in the United States market, along with Congo cash due to launch later this year.
These brand extensions highlight the fact, we have games that resonate with the players.
And offer a great opportunity to build on that performance.
And player loyalty.
In fact, we are also expanding our product breadth with our brands as we will be launching into new segments.
With our brands, including Dragon powered Keno and.
In Egypt, SH magic Keno.
Further we are combining our capabilities as we look to launch a customer brand. The table game later this year.
2024, we'll also see a new partnership in Europe, where we will deploy our slot content will be alive bonus features superville.
In partnership with state logic.
Innovation is in our DNA, and we launched connect and collect games across multiple platforms.
This innovative game mechanics has shown great initial results.
And we will continue to launch games.
Vernon: With this type of game behind them.
Combined with innovation within the holder reached in segments, such as cosmic cash selected jungle and Golden pressures plays well in the market as incremental innovation.
Vernon: Finally twin 24 marks a greater push between our internal studios and our huge player engagement tool set to collaborate as we are launching our first collaborative products in Q2.
This can bring it all together as bespoke promotions customized for our operators across our content.
It is expected to drive our continued content performance and extend its lifespan.
As I'm sure you will all be aware, we have seen an increase in M&A activity across the I gaming and sports betting space.
Vernon: With some of the recent deals indicated on the right hand side of the slides.
Against this backdrop and following recent increased interest in Bragg.
The board confirms that our special committee chaired by Independent Board Director Dawn Robertson.
Has now been informed to consider and explore strategic alternatives for the company.
These strategic opportunities may include a sale of the company or of this asset.
The merger financing will further acquisition of tech and content assets or any other strategic initiatives, but there can be no assurances that any transaction will be completed.
So to summarize we are pleased to report another year of growth with full year revenue rising 10, 4% to $93 5 million euros.
And adjusted EBITDA rising by 26, 3%.
$215 2 million euros.
Gross profit increased 10, 8% year over year to $49 9 million euros.
And as you have seen we have made good progress on organization and strategy and we have the strategic pillars in place to drive growth with our diverse product portfolio.
Which is in demand and multiple different regulated <unk> gaming markets globally.
We are issuing full year revenue guidance in the range of 100 to 209 million euros, which would reflect 9.1% to 16, 6% revenue growth.
With full year adjusted EBITDA guidance at a range of $15 two to $18 5 million euros.
Representing up to 21, 7% growth at the top end of the range.
Lastly, following increased M&A activity in the market as well as increased interest in Bragg.
Special Committee has been formed chaired by Dawn Robertson.
To explore strategic alternatives for Bragg.
Thank you all very much for attending this presentation of our fourth quarter.
And full year results now if you have questions ronen and I would be pleased to take them.
Thank you if you have a question. Please press star one on your telephone keypad. If you have queued up and want to withdraw your question simply press Star one again.
Your first question comes from the line of Neal Gilmer with Haywood Securities. Your line is open.
Yes, thanks, very much good morning, I'm on for John Luca. This morning, so thanks for taking my questions.
The first one is maybe sort of a two part.
Question here just wanted to better understand if you can just provide some more color on what the revision of the best City agreement sort of how that impacted the economics motion in the quarter as well as your outlook for 2024 and the guidance you provided and then the second part is sort of exiting 2024, I think you've previously talked about trying to target that 60%.
Most margin of 25% EBITDA margin is at.
Still achievable with that reworked agreement.
Thank you so.
We have reworked the facility agreement and obviously renewed renegotiated determine renegotiated the both the managed services and content delivery.
Part of the deal and extended the contracts until 2025 and that has obviously impacted our.
Our margins.
We expect the.
The margins to be at.
Obviously were in line with the provided guidance and then we expect growth in 2025 in line with ours.
Plans for increased deployment of content increase deployment of application platform and Pam in various different markets that are.
Regulators in the United States and it will be regulating in United States and Canada. Another.
Areas.
2024, and further in 2025.
Okay. Thanks for that.
And then you also highlighted that you.
Paid off $3 7 million euros of the convertible debt do you expect to continue doing that in 'twenty four and do you have an estimate of when do you expect to have it paid off completely.
Ronen can you take that please.
Yes sure. Good morning, how are you doing.
So yes, so in 2020, three we paid $6 million.
Vernon: Falling cash too in convertible and converting into shares.
We expect to continue exercising the right to pay down the existing convertible subject to ongoing management discussions and cash flow needs, we investing in the business and we're doing this decision literally on a monthly basis.
But we have five more installments, we outstanding $2 $5 million.
And to get management together with the board trying to make the right decision on the use of cash of repaying or converting into debt.
Okay. Thank you.
Maybe the final one for me here.
It did come in a little bit on your prepared remarks with respect to the strategic review, but.
Just wanted to see if there's any other additional insight that you can share as far as what sort of provoke the timing of announcing the strategic review did you get a specific amount or is there anything worth noting on the timing of the formation of the special Committee.
The strategic reviews.
Basically the result of an increased M&A activity across the space.
And obviously you know recent increased interest in Bragg.
The board decided that.
It's time to form a special committee that is going through.
Vernon: Consider and explore any strategic alternatives for the company.
Alright, thanks, very much I'll pass the line.
Thank you.
Your next question comes from the line of adhere Cathay with eight capital your line is open.
Hey, guys. Thanks for taking my questions.
Wanted to ask on <unk>.
The cadence of the proprietary games this year, our proprietary and exclusive games. This year, you said 29 potential games coming out this year similar to last year, maybe from the ones. You had released last year are there any learnings that you can apply to your newer land launches and are there any games that are really kind of.
Outperforming your expectations I guess, what I'm asking is is there the potential for being another Egyptian magic or Dragon power in there.
Yes. Thank you for your question so.
Definitely seeing potentially in our games being deployed.
In both American and European markets and <unk>.
We're obviously, hoping that we're going to get the next to the Egyptian magic.
Deployed from our portfolio and that's going to be launched in 2024, but I guess, it's going to depend the success of these games depend more on successful placement and promotion of these games.
Sort of post sales activities that are in place with certain clients I think that it's also going to be very important to <unk>.
Launch customer and exclusive games with select operators in both markets and that is going to.
That is going to define the success of our content in 2024 and further in 2025.
Speaker Change: Okay excellent and then there was something in the press release, just on the Netherlands market you mentioned heightened competition, how should we be thinking about your strategy in that market will you continue to try and defend your share will you try to take more share or how should we be thinking about the Netherlands market in 2024.
The Dutch market has been very important for us.
In the past two years and we're growing in this market.
Obviously, we want to diversify away from at the same time.
Speaker Change: And.
We are seeing op at both opportunities.
In the market and same regulatory St already inventory risks, obviously there'll be new restrictions that have been put in place just.
Just recently.
We see major opportunities in implementation of our juice platform with selected customers, we see opportunities in growing our share of wallet with selected Pam and aggregation clients.
And all in all the Dutch market is going to remain very high on our priority list for 2024 and 2025.
Speaker Change: Okay, Great and then I'll ask one more question and I'll pass the line just from the Brazil market. Some movement there in terms of regulatory approval and that could be a significant market and the biggest in Latin America. What are your expectations for that market what investments will you have to make to really.
Seize that opportunity.
Yeah, Great question, so the Brazilian market has already huge.
We won't be.
Making any further investments into investments into that market other than integrations with selected operators were integrated with the biggest operators in the market already.
And all we have to do is execute against our strategy to deploy.
Place and promote content with those operators and deliver customer and exclusive games with those operators and fight for the share of wallet with these operators, we obviously have a great product.
We are one of the leading aggregators in the market.
Obviously that is going to be something that is going to be in high demand in Brazil as well.
And.
That is going to.
Allow us to use as a leverage to deploy our proprietary interbody exclusive games and the most efficient manner and when a <unk>.
Share in a market that is going to satisfy our expectations.
Excellent. Thanks, a lot guys.
Your next question comes from the line of David makes Satkin with Cormack Securities. Your line is open.
Yeah, hi, thank.
Thank you and couple of questions.
So you said your Arsenal Susan down in Brazil are you, providing sports betting and online casino content when they can just Jeff.
A few more details there.
No we're not we're providing aggregation services as a platform and we're providing fuse is a platform and obviously providing delivery of third party content and providing third party exclusive content and proprietary content to.
Operators that are active in the market.
Okay.
And then you talked about the fact that you won't be.
Live in two other Canadian markets on 2020 car.
We plan to service them.
One can you tell us what prompted us to do.
<unk> planned to be servicing other operators that are servicing those balances on a gray market basis are you actually working with the eventual lottery Corp, and servicing them.
We are planning to go live with operators that are regulated.
Sure.
In.
Speaker Change: Markets in these regional markets in Canada, we do not plan to service.
Operators that are providing their services through offshore licenses.
Okay and can you tell us what you expect to rely on outside of Ontario.
Can't comment on which provinces that those are going to be.
Okay Alright.
Okay. Thank you.
Your next question comes from the line of Jordan Bender with JMP Securities. Your line is open.
Hi, This is Eric Ross on for Jordan, Thanks for taking my questions.
The first is the debt pay down will enter the next quarter and outside of the strategic review.
We're sitting here a year from now and the macro environment was similar to the same place.
Would you see as the best uses of free cash flow.
Ronen you want to take this question.
Yes sure good morning.
So.
From our perspective currently.
We utilized the cash I think is most effective way we took the loaning the Lind partners alone in 2022 in September we repaid over 6 million withstanding another $2 5 million.
During.
During 2020 during the next couple of five months the best use of the cash for US is investing in our product vessels around technology accelerate market that we want to be for 10 deploy our content and the right speed to invest heavily in.
Enhancing our pan to get to the new customers, especially on the Czech Republic market.
The Canadian market et cetera, that's the best use of our cash so mainly investment mainly at accelerating investment in particular product, if we want to put up with them.
And to accelerate our product mix as Matt said before.
Primary content is one of the key.
And defense customers.
And the <unk> platform is the key fuses. The case are we investing heavily on that that's a roadmap for 2024 and that literally answer the question, what's going to be the best use of our cash.
Okay, great and within the guidance can you talk about what you expect for growth in third party games versus proprietary thank you.
Matsui when it they get thrown me to say no no go ahead.
So we expect the growth of both of those particular product mix.
As Matt indicated a key strategic.
Item in our roadmap is is deploying our proprietary content will see the traction we see that how that is growing in the European market and also growing on the U S market, where live now with the majority of the operators in the U S market and we can see this traction month. After month. We also have a very good partnership with <unk>.
The exclusive content providers, Matt said blueberry and.
In gamma <unk>, which is a long standing supplier and we believe there's going to be quite much more acceleration, especially when we are deploying a new market like Brazil like market luck when canceling in the Swiss market Latam market Italian market and of course in this benchmark and so we.
We expect that to grow I would say everyone has a different starting point if you look at the product mix.
<unk> the things eighth slide number eight in the presentation, there's a different way to each one of them, where we are happy with the progress of proprietary I believe that's going to be very instrument instrumental year 2020 for fourth but both of them have also different type of product mix and costs associated to.
But the combination of the two and the ability to deploy aggregation platform. The <unk> platform will be able to allow us to increase both of them slightly different growth rate. One is coming from the high base, one coming from a low base.
But that's roughly what we expect in 2024.
If I may just add to that so the growth of the third party.
Content revenue depends largely on our ability to integrate and our ability to.
<unk> <unk> with D.
These large operators going into these newly regulated markets, where we are usually one of the.
Two or one of the three aggregation platforms for these operators and then it depends on the growth of these operators.
In this market the growth of the proprietary content largely depends on art.
On our deployment into existing operators in Europe, and United States and successful placement and promotion of these games within these operators is also it also depends on.
To a certain extent how fast some of the U S.
In other jurisdictions are going to regulate I gaming in the future and then obviously, we're going to be using our aggregation and fuse.
Positions with these operators too.
Aggressively placed and promote our content with the use of tools such as tournament jackpots recommendation engines.
Speaker Change: Leaderboards et cetera et cetera.
Once again, ladies and gentlemen, if you have a question it is star one.
Your next question comes from the line of Jack Vander <unk> with Maxim Group. Your line is open.
Okay, great. Good morning, guys. Thanks for taking my questions.
So similar to what others have asked but just looking at the 2023 revenue growth is up over 10%.
In your 2024 guidance at the midpoint implies 13% growth.
Thats, an acceleration you've already outlined a list of growth developments to exhaustion, but what would you just attribute is there anything in particular thats like the key driver of that actual growth acceleration or is it more due to maybe a slower back half of the year. Thanks.
So the key driver for acceleration is going to be like I said deployment of proprietary and third party exclusive content.
Speaker Change: Within.
The.
Existing BDC operators and successful deployment of aggregation and infused platforms with clients international operators are local operators.
Some of the newly regulated markets. There are also obviously Pam opportunities that we have in the pipeline and acceleration is going to depend on successful launches of these operators.
That are going to obviously launch time aggregation fuse and proprietary and third party platform. So the acceleration is going to depend on their success as well.
Okay. That's helpful and maybe just one more you added more supplier licenses in 2023 regulators in Sweden Gibraltar in Isle of Man. Most recently can you just speak to the importance of these new licenses in general and how they factor into your 2020 for outlook and are you actively pursuing additional licenses.
As we speak.
So these licenses are going to allow us to effectively distribute third party content into B to C. Operators are licensed in these jurisdictions and are operating in the international environment.
Speaker Change: And we are going to continue to pursue.
Any b to B licenses in any of the regulations that arc or any of the jurisdictions that are going to recognize in 2024 and 2025, we have recently been approved.
In Peru.
If any.
If we're going to see any jurisdiction regulate I gaming with sports betting we're going to be applying for the license and following the.
The growth of our <unk> partners in those.
Jurisdictions, either through deployment of our Pam deployment of our aggregation or deployment or third party.
And the third party exclusive and proprietary content.
Okay, great. Thanks for taking my questions.
There are no further questions at this time I will turn the call Kenny for closing remarks.
Yes. Thank you everyone for joining the call. This morning, we had another very successful year and before we sign off I want to thank all the bloggers, who made this possible without all of the people who work really hard throughout the year. We wouldnt have been here. So thank you all for your hard work and we look forward to hosting everybody on our next call our Q1 2020.
Have a great morning, everybody.
This concludes today's conference call. We thank you for joining you may now disconnect your lines.
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Sure.
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Yes.