GiG Sees Quarterly Growth For The First Time In Four Quarters

• Gaming Innovation Group (GiG) posted quarterly growth for the first time in four fiscal quarters in Q1 2020.
• The company recorded $33.7 million in revenue and $2.7 million EBITDA.
• GiG is restructuring its sports betting services to cut costs, although its efforts to do so have been put on hold by COVID-19.
• While growth is a positive development, GiG’s share price has dropped over 90% since 2017 and the company’s widespread cost-cutting moves will make further growth difficult.

SAINT JULIAN’S, Malta – In Q1 of the 2020 fiscal year, Gaming Innovation Group (GiG) recorded quarterly growth for the first time since Q4 2018, reversing four consecutive quarters of decline.

GiG, a cloud-based online gambling company, brought in $33.7 million in revenue and $2.7 million in earnings before interest, taxes, depreciation, and amortization (EBITDA).

The company’s sports betting services make up only a small portion of its overall portfolio, accounting for $200,000 in revenue and an EBITDA of -$1.8 million.

GiG assured investors in its recent quarterly report that this negative EBITDA is related to a restructuring of sports betting services, which it claims will result in monthly savings of $434,000.

This plan involves extending GiG’s reach as a business-to-business provider in the rapidly growing U.S. legal sports betting market. The company also says it is investigating other joint ventures as a potential avenue to reach the full earning capability of its sports betting services and sportsbook.

GiG’s quarterly reports should begin to reflect the financial impact of this restructuring in Q3 2020.

The Coronavirus pandemic has put these plans on hold indefinitely as there is no firm timeline yet for when most sports leagues around the world might resume play.

Reversing A Trend?

Right now, the most pressing developments for GiG are its launch of both a new data platform—GiG Data, which it plans to both integrate into its own platform services and sell to other providers—and a new lottery game, MegaLotto.

Neither one of these developments made much of a splash in Q1, but CEO Richard Brown indicated that he expects that both will pay dividends down the line.

GiG desperately needs to find some success with a new strategy, as the company’s finances have been in freefall for over a year now. Its share price has dropped by over 90% in just the last three years, and 65% in the last year alone.

The decision to focus more on the emerging U.S. market is a good one, but it may come too late to matter. The U.S. online sports betting scene has become very crowded with competitors already.

Investments in other developing markets like Latin America and Africa could prove more fruitful.

GiG’s business decisions should at least help stabilize the company financially, but layoffs to reduce total personnel to 430 people and widespread cost-cutting measures will be seen by investors as GiG waving a white flag.

Growth is difficult for any company in the current economic climate, but especially for one as financially damaged as GiG.

News tags: Coronavirus | COVID-19 | EBITDA | Gaming Innovation Group | GiG | MegaLotto | Q1 2020 | Richard Brown