Delivers strong quarterly performance with
improvement in operating results over Q4-2021 Profitable B2C
operations ahead of schedule in Italy Continues its
expansion efforts into the U.S. market Announces exciting
opportunities with Italy’s largest gaming operator with ambitious
global expansion plans
Elys Game Technology, Corp. (“Elys” or the Company”)(Nasdaq:
ELYS), an interactive gaming and sports betting technology company,
today announced the financial results for the quarter ended March
31, 2022.
Release Highlights
- Quarter-on-quarter GAAP revenue (Q1-2022 vs Q4-2021) grew by
$0.57 million or 5% to $12.2 million on the back of a strong
Q4-2021 performance.
- Selling expenses in Q1-2022 decreased to $9.3 million (4.3% of
turnover) from $9.9 million in Q4-2021 (4.6% of turnover).
- Q1-2022 non-GAAP betting handle (Turnover) was $217.6 million
compared to Q4-2021 at $214.9 million, with an improved blended
Gross Gaming Revenue hold of 7.0% compared to 6.8%.
- Disaggregated sportsbook hold continues to perform in double
digits at an exemplary 18.3% for Q1-2022.
Michele Ciavarella, Executive Chairman of Elys Game Technology
stated: “Elys continues to improve on its performance with another
strong quarter achieving a turnover growth of $2.7 million over an
already strong Q4-2021 performance. This growth was predominantly
in our online betting channel in Italy while our Q1-2022 GAAP
revenue also included an improvement in service revenues to $0.7
million from $0.6 million in Q4-2021.
We continue to invest in our sportsbook technology to enhance
our remarkable product performance. Our betting platform is highly
scalable and adaptable, making our cost of entry into new regulated
markets highly attractive for our customers and for Elys. Our
tactical movements in the Italian market have resulted in
profitable achievements ahead of schedule as our divisional
management at Multigioco took advantage of COVID lockdowns to port
closed land-based operations and grow our online channel, and we
expect that the recently obtained ADM (Italian regulator) rights in
Italy will return Multigioco B2C land-based operations to pre-covid
levels through the remainder of 2022. These improvements are in
line with our strategy to deliver on our 2023 performance
objectives. We are also on track to accomplish our pathway to
profitability and remain fully committed to drive long-term
shareholder value and are completely focused and better organized
to deliver substantial sustainable growth in all our active
markets.”
Quarterly
financial highlights
The following table summarizes our
consolidated financial results for the quarter ended March 31, 2022
and 2021 (in millions).
2022
2021
In $
millions
Revenue
12.2
14.2
Costs and expenses
14.3
14.8
Loss from operations
(2.1)
(0.6)
The decrease in revenue from Q1-2021 to Q2-2022 of $2.0 million
is due to the pandemic related closure of our land-based locations
in Italy from June 2021, impacting directly on the loss from
operations. We anticipate that we will regain this market share and
improve our performance as we deploy land-based operations in new
locations throughout Italy in the coming 12 to 18 months.
North America Operational
Highlights
We continue to leverage of our expansion into conventional
casino resorts and non-conventional small business betting shops
into the U.S. market. We are accelerating the signing of additional
restaurants, bars and similar small business venues that Elys plans
to expand across U.S. and Canada as regulations permit, including
initiating land-based betting operations at Ocean Casino Resort in
New Jersey ahead of a larger grand opening of the all-new
sportsbook at Ocean expected to open in time for the next NFL
season kick-off.
We are experiencing continued success, beyond our initial
expectations, in our pilot launch at Grand Central Restaurant and
Sportsbook which is increasing the interest of small business
operators in our product offering in Washington D.C. as well as
several other states.
Our strategy to develop and grow in the U.S. market resulted in
an increase in: personnel costs of $0.4 million, primarily due to
the acquisition of USB; professional and legal fees related to our
expansion in the U.S. market of $0.25 million; and non-cash
incentive compensation of $0.3 million.
Italian Operational
Highlights
“As mentioned in our previous earnings release, at the height of
the COVID pandemic we implemented a defensive strategy that
included a stepped approach in Italy by first targeting growth
towards our Multigioco online operations which had resulted in
significant reduction of land-based handle and revenue that was
offset by growth in our online betting turnover and that grew in
Q1-2022 by $2.7 million over Q4-2021,” stated Interim CFO of Elys,
Carlo Reali. “Commissions paid to agents decreased by $1.4 million
to $9.3 million representing 4.3% of turnover compared to 4.4%,
underlying our continuous efforts to improve our margins. As part
of our B2C operational strategy in Italy, the second stage of
growth began in Q1-2022 where we acquired approximately 50 ADM
land-based license rights, and which we expect to increase by an
additional 50 rights over the coming 12 to 18 months that are
instrumental in re-deploying our retail distribution in Italy. We
expect this investment in our land-based channel could generate
additional revenue of approximately $20 million per year and return
to pre-pandemic levels without significant costs. The additional
ADM rights also afford us the ability to certify both our Italian
land-based sportsbook and our Virtual Generation virtual sports
platform that could also lead to additional B2B revenue
opportunities as well as ancillary virtual sports content revenue
in Italy and further across other European and South American
markets.”
About Elys Game Technology, Corp.
Elys Game Technology, Corp., is a B2B global gaming technology
company operating in multiple countries worldwide, with B2C online
and land-based gaming operations in Italy. Elys offers its clients
a full suite of leisure gaming products and services, such as
sports betting, e-sports, virtual sports, online casino, poker,
bingo, interactive games and slots in Italy and has operations in
five states as well as the District of Columbia in the U.S. market.
Elys’ vision is to become a global leader in the gaming industry
through the development of pioneering and innovative
technology.
The Company provides wagering solutions, services online
operators, casinos, retail betting establishments and franchise
distribution networks. Additional information is available on our
corporate website at www.elysgame.com.
Investors may also find us on Twitter @ELYS_gaming.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
identified by the use of the words “could,” “believe,”
“anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,”
“predict,” “potential,” “project” and similar expressions that are
intended to identify forward-looking statements and include
statements regarding enhancing product performance, returning
Multigioco B2C land-based operations to pre-covid levels through
the remainder of 2022, our strategy to deliver on our 2023
performance objectives, our pathway to profitability, our driving
long-term shareholder value, being focused and better organized to
deliver substantial sustainable growth in all our active markets,
deploying land-based operations in new locations throughout Italy
in the coming 12 to 18 months, accelerating the signing of
additional restaurants, bars and similar small business venues that
Elys plans to expand across U.S. and Canada as regulations permit,
the interest of small business operators in our product offering in
Washington D.C. as well as several other states, increasing by an
additional 50 rights over the coming 12 to 18 months that are
instrumental in re-deploying our retail distribution in Italy,
investment in our land-based channel, generating additional revenue
of approximately $20 million per year and return to pre-pandemic
levels without significant costs, the ability to certify both our
Italian land-based sportsbook and our Virtual Generation virtual
sports platform, and additional B2B revenue opportunities as well
as ancillary virtual sports content revenue in Italy and further
across other European and South American markets. These
forward-looking statements are based on management’s expectations
and assumptions as of the date of this press release and are
subject to a number of risks and uncertainties, many of which are
difficult to predict that could cause actual results to differ
materially from current expectations and assumptions from those set
forth or implied by any forward-looking statements. Important
factors that could cause actual results to differ materially from
current expectations include, among others, the Company’s ability
to enhance product performance, the Company’s ability to return
Multigioco B2C land-based operations to pre-covid levels through
the remainder of 2022, the Company’s ability to deliver on our 2023
performance objectives, the Company’s ability to achieve it’s
pathway to profitability, the Company’s ability to drive long-term
shareholder value, the Company’s ability to be focused and better
organized to deliver substantial sustainable growth in all our
active markets, the Company’s ability to deploy land-based
operations in new locations throughout Italy in the coming 12 to 18
months, the Company’s ability to accelerate the signing of
additional restaurants, bars and similar small business venues that
Elys plans to expand across U.S. and Canada as regulations permit,
the Company’s ability to foster the interest of small business
operators in our product offering in Washington D.C. as well as
several other states, the Company’s ability to increase by an
additional 50 rights over the coming 12 to 18 months, the Company’s
ability to investment in our land-based channel, the Company’s
ability to generate additional revenue of approximately $20 million
per year and return to pre-pandemic levels without significant
costs, the Company’s ability to certify both our Italian land-based
sportsbook and our Virtual Generation virtual sports platform, the
Company’s ability to generate additional B2B revenue opportunities
as well as ancillary virtual sports content revenue in Italy and
further across other European and South American markets, the
duration and scope of the COVID-19 outbreak worldwide, including
the impact to state and local economies, and the risk factors
described in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2020 and its subsequent filings with the U.S.
Securities and Exchange Commission, including subsequent periodic
reports on Form 10-Q and current reports on Form 8-K. The
information in this release is provided only as of the date of this
release, and the Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, after the date on
which the statements are made or to reflect the occurrence of
unanticipated events, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220517005899/en/
Elys Game Technology, Corp. Michele Ciavarella, Executive
Chairman Tel.: 1-628-258-5148 Email: m.ciavarella@elysgame.com
Elys Game Technology (NASDAQ:ELYS)
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