00:06 Good morning. My name is Lisa and I'll be your conference operator today. At this time, I would like to welcome everyone to the Bragg Gaming Group Q3 twenty twenty one Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] 00:36 Thank you. I would now like to turn the conference over to Mr. Richard Carter, CEO. Please go ahead, sir.

00:44 Thank you, operator. Good morning, everyone and thank you for joining our third quarter twenty twenty one earnings conference call. I’m Yaniv Spielberg, Chief Strategy Officer for Bragg Gaming Group. I'll be hosting today's call alongside my colleagues Chief Executive Officer, Richard Carter, who’ll comment on our third quarter performance and provide an update on the progress we're making with our growth initiatives and Ronen Kannor, our CFO, who will review our third quarter results and our guidance for the fourth quarter of twenty twenty one as well as the projections for twenty twenty two. 01:13 If you have not already done so, you can download our Q3 earnings call presentation from our website at www.bragg.games/investors in the section called Investor Presentation. The presentation we will review today is called twenty twenty one third quarter earnings presentation. On this call, we'll review Bragg’s financial and operating results for the third quarter of twenty twenty one. Following our prepared remarks, we will open the conference call to a question-and-answer period. 01:41 I'll start the call with some brief cautionary remarks, regarding certain statements that may be made on this call. Certain statements made on this conference call and our responses to various questions may constitute forward-looking information, or future-oriented financial information within the meaning of applicable securities law, statements about expected growth, prospective results, strategic outlooks, and financial and operational expectations, opportunities and projections rely on a number of assumptions concerning future events, including market economic condition, business prospects or opportunities, future plans and strategies, technological developments, and anticipated events, trends, and regulatory changes that may affect the corporation and its subsidiaries and their respective customers and industries. 02:22 While we believe these assumptions to be reasonable, as subject to a number of risks uncertainties and other factors, many of which are outside the company's control in which could cause the actual results, performance or achievement of the company to be materially different. There could be no assurances that these assumptions or estimates are accurate or any of these expectations will prove accurate. For complete discussion of these factors, please refer to our recently filed press release and other publicly available disclosure. 02:49 With that said, I'd like to turn the call now to our CEO, Richard Carter. Richard?

02:54 Good morning, everyone. Throughout the third quarter, we achieved significant progress with our strategic growth initiatives, including expanding existing customer relationships, building out the pipeline of premium in-house iGaming content and providing our content and offering to new markets. As a result, we are transforming Bragg into a leading global content focused B2B iGaming provider, and our progress on this front is evident in the third quarter results. 03:24 Just a quick note, as Ronen and I review the third quarter performance, our comments will reference the results in euros. For the third quarter, we reported revenue of twelve point nine million EUR, which is up approximately ten percent year-over-year. In addition, unique players were up fourteen point four percent to two point one million EUR and wagering revenue was up four point eight percent to three point two billion EUR, given the strong third quarter performance, our performance to-date in the current quarter and our forward outlook. 03:56 We have raised our twenty twenty one full year revenue guidance to a range of fifty five million EUR to fifty six million EUR and our adjusted EBITDA outlook to between six point six million EUR and six point eight million EUR. While also raising our twenty twenty two revenue outlook to a range of fifty nine million EUR to sixty one million EUR on our twenty twenty two adjusted EBITDA outlook to between six million EUR and seven million EUR. These results and our forward expectations represent strong performance and underlying growth in our non-German market. 04:29 We expect our revenue mix to continue to reflect the decline in the percentage we derived from recurring revenue in the German market going forward, even as we continue performing in line with our expectations and following the implementation of the new…

19:29 Thanks, Richard. Good morning, everyone. I'll begin my comments on slide twenty. Third quarter revenue was up nine point nine percent year-over-year to twelve point nine million EUR. The increase in revenue was driven by organic growth from existing global customers as well as from the full quarter of revenue contribution from our Wild Streak acquisition. 19:52 Gross profit increased by thirty point one percent to six point six million EUR and with margin increasing as well by eight point eight basis points to fifty one point four percent, which primarily attributed to a higher proportion of revenue derived from our platform and managed services, alongside with Wild Streak games revenue, which has no cost of sale compared to games and content, which have third-party process associated, more by the gross profit will be explained in the next line. 20:20 Adjusted EBITDA for the quarter ended one point four million EUR, down only by zero point four million EUR. Adjusted EBITDA margins ended eleven percent which is four point seven basis points down when compared to the previous year, and this is due mainly to increase salary and sub-contractors costs, given our ongoing investment in expanding our software development, product and management functions across the enterprise. 20:43 Net loss was two point five million EUR compared to three point two million EUR in the prior year period. The year-over-year increase was primarily driven by the incremental increase in employee costs as well as professional services fees, which were incurred due to the NASDAQ listing. This increased cost were offset in part by the expanding gross profit margin and the reduction in deferred and contingent consideration payable. 21:11 From KPIs perspective, wagering revenue generated by customers increased by four point eight percent year-over-year to three point two billion EUR and…

25:43 [Operator Instructions] Your first question comes from the line of Neal Gilmer with Haywood Securities.

25:49 Yeah. Good morning. Thanks very much. Congrats on a strong quarter and the increased guidance. I got a few questions here. I'll probably hit two of them and then pass the line here. I guess first of all of yesterday with some of your comments there was your success in the Netherlands. Wondering if you can provide a little bit more commentary on how do you think you've gained that kind of market share in a fairly short period of time? And is that something you can leverage as you enter the new markets and have similar success there?

26:18 Yeah. Hi, I'll take that. Good morning to you. In terms of -- I think it was quite a unique circumstance in the Dutch market. I mean, what happened there isn't necessarily going to be replicated in other markets, but effectively, you had a closing down of the market and then you had it reregulated. So, I'm sure as you've seen a lot of the key players left the market and that left a big opportunity the companies like Bragg with our market leading platform to go into that market also with our content and to take material market share on day one. So I think it's not something that we'd expect to replicate in other markets going forward just because of the uniqueness of what happened in Holland.

27:05 Okay. All right. Thank you. Then taking a look at your comments about your total addressable market that sort of you started into this year, I think you said two point eight billion EUR and I think you said by the end of next year, eighteen billion EUR you contrast that with what you have as far as revenue growth implied in your guidance and the revenue guidance sort of seems a little bit conservative given what you guys have been able to accomplish to date. So, is there a decent amount of decrease continued in the German market that you are factoring into that guidance. Just I’m trying to -- take a look at how much your addressable market increase?

27:44 So there are quite a moving parts in terms of Germany, no, we are actually, I think if you look and go through the detail whether that’s a slight increase in our expectations for the twenty twenty two there. But in terms of just how it works from a TAM perspective. So as we enter a new market give it Italy, give it UK, you're probably looking at ramp up in terms of rolling the content around getting all of the integrations, all of the legal contracts done, you're at a least probably twelve months. So although our time increases once we get access to the U.K. market, let's call it sort of five point five billion EUR to six billion EUR, actually it takes us several quarters to get embedded and to start generating revenue and the materiality of it will increase. So we've obviously tried to be prudent because it's a new market and new things take a little bit of time. We’ve assumed sort of ramp up over a sort of four to six quarter basis. So after sort of six quarters we'd be expecting to sort of hit about seventy five percent of the market.

28:59 Okay. That's helpful. So then obviously then that really drives the revenue growth into sort of twenty twenty three, right? That's where you hit sort of that for …

29:07 Yeah, absolutely. And, obviously, we are razor focused on trying to bring that ramp up forward, but as we said here right now, it is obviously quite difficult to predict the timings on that quarter-to-quarter. But we're obviously working very, very hard to bring that forward. So we don't obviously look to do better than that. But yeah, that's basically the background to that.

29:31 Okay. That's great, Richard. Thanks. Appreciate your answers.

29:35 No worries. Thank you.

29:37 Your next question comes from the line of Adhir Kadve with Eight Capital.

29:43 Good morning, guys. Thanks for taking my questions. I missed the part on Germany where you kind of broke down the Germany revenue, if you could just maybe go through that just quickly one more time for me. I appreciate.

29:56 What are you referring to in particular in Germany?

29:58 Just I think the offset I think you guys had mentioned, I just cut the tail end of it you mentioned that some of the recurring revenue from Germany it being offset by non-recurring revenue from Germany. It be offset by continuing recurring revenue, if you could just go through that pretty important point. Thanks.

30:17 Just to give a bit more color on sort of what shaped the performance in Q3, so basically, as we gave guidance and headed into the quarter, we were looking at sort of doing about nine point eight million EUR of revenue. We obviously ended up doing a lot more than that and sort of drivers of that is partly we did an additional just over two million EUR of revenue after Germany, which is non-recurring. And we did that additional revenue because of the continuing regulatory uncertainty and the continuing lack of clarity around licenses, which effectively extended the timeframe beyond our initial expectations. 31:04 There was a lot of back and forth going on with our clients, showing with evidence that going through the licensing process, and then they were failing to get information back. So we decided to make a decision in September where we just decided to just IP block. So if we hadn't got any clarity by them, we just IP blocked customers, and then once they find out the future then we will obviously allow them to come back into the market. So that's predominantly the sort of color behind what happens in Germany, underlying still trading in line with our expectations on a recurring basis.

31:44 Okay. Fantastic. And then I saw one thing, just on Dragon Power going into Michigan and West Virginia later on in the year. Do you find that game usually just translate into those markets similarly well if it's done in New Jersey over these past years that you kind of mentioned?

32:01 It's a very good question. I think given if we take other content that’s work very, very well in New Jersey and is replicating success in Michigan, then that's what we based on. So our games are performing extremely well in New Jersey have been rolled down into Michigan and has performed as well in Michigan. So, we think that should be the same as well in Michigan.

32:32 Okay. Good to hear. And then just lastly, just one more for me, in just terms of M&A obviously we've seen an uptick in M&A overall in the industry. Can you maybe talk about your thoughts on M&A and how you guys are thinking of obviously the Wild Streak and Spin acquisitions have been done, but are you thinking about anything else just given the uptick in M&A in the industry?

32:55 No, I mean, I think we've spoken before, I think it's invertible and that going to be more M&A and it’s going to continue. We saw these cycles in Europe and I'm sure we're going to see the same in the North American market in terms of Bragg today, I think we have the building blocks in place, and we have very clear vision in terms of where we are heading. So as of right now, we're not really focused on M&A we're focused on execution and delivery.

33:31 Awesome. Thank you very much, Richard I'll pass the line.

33:34 Thank you.

33:35 Your next question comes from the line of Matthew Lee with Canaccord.

33:40 Hi. Great job on the quarter guys. Maybe just a housekeeping question to start. Can you give us a little bit of additional color into what prompted the twenty twenty two guidance increased maybe from a geographical perspective? Is maybe the European market being better than expected or is it more of a European expense sorry, North American expansion thing?

34:00 Good morning. I think in terms of -- we don't really want to get broken down into each individual market, but I think clearly, we've rolled out into some new markets recently. And we've signed some interesting deals with some major operators and that effectively is driving the increase and that's going to be spread across multiple markets, but yes, I think the majority of the increase is driven outside of North America.

34:35 Great. And then maybe can we have some color on the economics of the Bluberi deal. I assume that a revenue share, but given you're putting more accurate in reporting the content over to the online market, is that revenue split up maybe a bit more favorable than a traditional content deal?

34:51 I don't really want to get into the real ins and outs of the Bluberi deal apart from I think we're very excited to be partnering with Bluberi. We think it's a fantastic deal for both companies. I think it's a good deal to Bragg and sure they are also very a very good deal for Bluberi given the distribution that we can offer to a company like that. So and I think it be obviously very incremental to our business from a revenue and profitability perspective over the medium term?

35:36 Great. And then lastly in terms of margin expansion, I think I heard you say sixty percent gross margin by twenty twenty four. Can you help us understand where that comes from? Is it primarily from making more content proprietary or something else?

35:49 Yes. I mean, it comes from quite a few levers but as we pivot away from taking third-party content and owning our own content. And at the same time, we're obviously expanding other high margin areas of the business. So the platform business is beginning to ramp up very, very significantly. So you'll see that during the quarters of this year, you're starting to see a positive incremental contribution from that side of the business. And I think Ronen also highlighted the Wild Streak acquisition adds roughly I think, is it three percent to four percent Ronen to the gross profit margin?

36:31 Yes. Correct.

36:32 So that's also healthy in terms of the ramp up. And as we go through next year and the year after we're producing more in-house content and our platform is continuing to increase and that's how you get the expansion in the gross profit margin.

36:51 All right. Thanks so much.

36:52 No worries.

36:54 Your next question comes from the line of Lisa Thompson with Zacks Investment.

37:01 Good morning.

37:02 Good morning.

37:03 I just have a couple more questions. Could you talk a little bit about what your experience has been with Spin now that you've been around them in another three months, if you change any of your expectations on their performance or how you might be able to roll out differently than what you had been thinking before?

37:26 So, in terms of -- yes, I mean just remember that we still haven't closed this deal with Spin. So that's not expected to close until mid-December. But in terms of we've been obviously working very, very closely together in terms of preparation for our -- combination and obviously the entry into the North American market. So we were at June three, as I spoked about in our presentation and we had a some fantastic reception from operators there looking at both the ORYX, Wild Streak, and Spin products. 38:07 I think obviously, over the last three months, we've announced today this Bluberi deal and we wouldn't have been able to do that Bluberi deal without Spin and what they brought to the whole overall offering. So that was obviously very, very important and that's where it’s adding obviously a lot of value. We've also look -- they've also brought Connecticut, which is not our market that we had envisioned when we did this transaction. And we're also working on Ontario. So, I think they've added a lot over the last three months, and I'm sure we'll continue to do so as we move forward.

38:47 All right. And then one other thing I'm curious about. I mean, other than the countries you're pursuing and talking about already, where is the biggest opportunity for you that's still out there and how do you approach entering new countries? Like is there some sort of methodology deciding what you're going to do?

39:11 Look, I think we've already laid out the big opportunities for us, the UK, Italy, Holland as a big opportunity. We've obviously talked about that today. And obviously, we've got off to a very good start there. But the UK the biggest regulated online casino market in the world and we're not there. So that's really the big opportunity for us. In terms of how do we execute in that market? Well, we need to have good content and doing deals like Bluberi today, given the Wild Streak acquisition we made earlier this year given how we're building out our own in-house studios that's how we're going to be able to execute and commercialize the business into new markets and that's really the focus over the next six to twelve months. And then there are obviously really new markets like Ontario and also probably focus a lot more as we go into twenty twenty two in LatAm. So we'll talk a bit more about that on future calls, but really for us sort of key focus near term is UK, Holland and then leveraging into North America market.

40:29 Okay, great. Look forward to it. Thank you. Those are my only questions.

40:33 Thank you very much.

40:34 Your next question comes from the line of David McFadgen with Cormark Securities.

40:40 Yes. Hi. A couple of questions. So, obviously, you guys have done quite well in the Netherlands with double-digit market share right in the gate, as some more operators enter the markets, do you think that you can sustain that level of market share?

40:55 Well, we're not assuming, we are going to sustain that number one. We're obviously hopeful we can. And we will continue to work very, very hard. I mean, part of that is going to be just looking at how and when other operators come back into the market is very difficult right now to predict, a lot of people are saying that some of the big operators have left the market. We will potentially get licensed in Q2. Some people are saying they won't get licensed at all next year. So and I think that's really going to be where we end up in terms the market shares. But I think the interesting thing is that the operators were supporting, obviously are able to go into the affiliate deals and basically create some moat around them. So I think they'll definitely have been a very strong position to defend themselves once other operators coming to the market. But in terms of our assumptions, in terms of twenty twenty two and twenty twenty three we're certainly not assuming that we're going to be staying at those market shares now. Hopefully, we'll do better than those assumptions.

42:08 Okay. And you highlighted Bluberi in your presentation, I was just wondering, can you give us an idea on how successful Bluberi games are and the land-based side. Just wondering how they would translate online?

42:24 I don't have that data to mind, to be honest with you. I think you can get that data quite easily. I think in terms of the buzz in the industry, these guys have been doing better and better over year. So I think they continue to take market share so and gains already resonate with the casino as we've spoken to, but I don't have the exact data in terms of whether it gets rank versus others, but we can definitely get hold of that.

42:54 Okay. And then just on Wild Streak, it appears us though maybe that the company is performing better than your expectations so far is that correct or is it online?

43:08 So far slightly ahead of our expectations. Yeah.

43:12 Okay. And then you mentioned Dragon Power, it did one million in GGR in New Jersey alone with that for to Q3 or is that for a bit longer period than that?

43:27 That was for the month.

43:27 Well, for a month. Okay. What month was that, do you mind me asking?

43:34 I think that was August. I'll come out, confirm and email account both the top. I think. Ronen, do you have the number?

43:46 No. I think it's as you said, Richard for month, but can you check this point?

43:50 I think it was August. So I'll come back to you if it wasn't. I mean, the idea of this slide is just clearly to show that this game has been established and it continues to perform month for month actually it has been increasing. So this is obviously unusual the majority of casino content. And I think that's we're try to make the point that because it's land based background, broad prices are going it's criteria games. It's a much longer process and that's well drives this type of performance.

44:34 Okay. That's fair. Thank you.

44:37 Thank you.

44:45 [Operator Instructions] Your next question comes from the line of Michael Shelton with FRC.

44:51 Good morning, guys. I was wondering if you can talk a little bit about the sports betting opportunity that you may be seeing in the U.S. and how you think about that from a long term vision standpoint?

45:02 Good morning to you. To be honest with you, we're not really focused on sports betting, especially from the North American perspective. There are lots of other people that have a product offering, which is obviously a lot better than us. So it's just not something that we've focused on. We think the bigger opportunities is on the online casino vertical and that's where we're focused on that.

45:30 Thank you.

45:33 At this time, there are no further questions. I would like to turn the call back over to Yaniv Spielberg for closing remarks.

45:40 Thank you much for joining our call, and we appreciate the questions and the insights. We'll see you all on our next call. Thanks a lot.

45:49 Thank you.

45:50 Thank you very much.

45:52 This concludes today's conference. You may now disconnect.