GAN Limited Reports $6.8 Million Net Loss in Q1 2025, Revenue Declines 4.2%

GAN Limited reported a net loss of $6.8 million for the first quarter of 2025, a significant increase from the $4.2 million loss recorded in the same period of 2024. Revenue for the quarter was $29.4 million, down 4.2% from $30.7 million year-over-year. The decline in revenue was primarily attributed to the expiration of a multistate B2B commercial contract, which negatively impacted earnings in the United States. However, the company saw growth in its B2C segment, particularly in Europe and Latin America, which helped offset some of the losses.

Operating costs for GAN increased to $34.4 million, up from $34.0 million in the previous year, driven by a rise in cost of revenue, which rose by 14.9% to $10.7 million. This increase was largely due to higher gaming taxes associated with the B2C operations in Latin America. General and administrative expenses also rose by 10.5% to $7.9 million, influenced by the establishment of a credit reserve related to a payment service provider. In contrast, product and technology expenses decreased by 18.2% to $7.9 million, reflecting ongoing cost-saving initiatives and a reduction in headcount.

In terms of operational metrics, GAN reported a total of 235,000 active B2C customers, a 6% increase from 222,000 in the prior year. The B2C segment generated $24.3 million in revenue, a 32.6% increase compared to $18.3 million in the same quarter of 2024. The B2B segment, however, saw a dramatic decline in revenue, dropping 58.8% to $5.1 million, primarily due to the aforementioned contract expiration. The company’s B2B take rate improved to 3.5%, up from 2.0%, indicating a shift towards higher-margin products.

GAN Limited is currently navigating a complex financial landscape, with an accumulated deficit of $324.1 million as of March 31, 2025. The company has cash and cash equivalents totaling $39.9 million, alongside current liabilities of $32.8 million. The firm is in compliance with its Amended Credit Facility, which has a principal balance of $48.1 million and requires a minimum liquidity of $10 million. However, the company has expressed concerns about its ability to meet future obligations, particularly in light of the expiration of its B2B contract and the potential impact on cash flows.

Looking ahead, GAN Limited is focused on strategic initiatives to enhance profitability, including expanding its B2C operations in new jurisdictions, integrating Coolbet’s technology into its B2B offerings, and implementing cost-reduction measures. The company anticipates that the closing of its merger with SEGA SAMMY CREATION, expected in the second quarter of 2025, will provide additional resources to support its growth strategy. However, uncertainties remain regarding market conditions and regulatory approvals, which could affect the company's financial outlook.