Hello, and welcome everyone to the Bragg 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. [Operator Instructions] I would now turn the conference over to Yaniv Spielberg, Chief Strategy Officer. Please go ahead.

Thank you, operator. Good morning, everyone and thank you for joining our fourth quarter and fiscal year 2023 earnings conference call. I am Yaniv Spielberg, Chief Strategy Officer for Bragg Gaming Group. I’ll be hosting today’s call alongside my colleague, Matevz Mazij, our CEO who will comment on our fourth quarter and fiscal year '23; and Ronen Kannor, our CFO, will review and discuss our fourth quarter and financial results '23 results. If you have not already done so, you can follow our earnings call presentation from our website at investors.bragg.group, in the section called Latest Presentation. On this call, we will review Bragg’s 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-and-answer period. 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 laws. 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 and economic conditions, 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. 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 and which could cause the actual results, performance or achievement of the company to be materially different. There can be no assurance that these assumptions or estimates are accurate or that any of these expectations will prove accurate. For a complete discussion of these factors, please refer to our recently filed press release and other publicly available disclosure. With that behind us, I’d like to turn the call to our CEO, Matevz. Matevz?

Good morning, everyone. My name is Matevz Mazij, I’m Chairman and CEO of Bragg. I’m going to run through 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 Ronen Kannor, 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, 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 iGaming industry. As Ronen will show you in the financials, 2023 was another year of growth, but more than that, Bragg has gone through a transformational year. Last summer, we restructured the Board of Directors, and in August, I rejoined the company as CEO. And since 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, but first let's turn to Slide 5 to take a look at some key operational highlights from the full year of 2023 and from the fourth quarter. During the year, we signed global Tier 1 agreements with Betsson, 888/William Hill and PokerStars, and we continue 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 iGaming markets, including with several operators in New Jersey, Michigan, Pennsylvania and Connecticut. Our exclusive content portfolio continues to resonate well and we have seen a particularly positive trend with this content in North America from the fourth quarter onwards. Meanwhile, we also continue to build our content business in the international iGaming markets such as the United Kingdom, Spain and Switzerland. In the fourth quarter, we were pleased to launch with Superbet in Brazil, with our proprietary content as well as with casino aggregation and our Fuze player engagement platform. During the quarter, we expanded the distribution reach of our newest games and technology in New Jersey with our latest launch with BetMGM, and we were pleased to announce in the fourth quarter that we successfully negotiated our time extension agreement with BetCity in the Netherlands, including continued content and product delivery. After Ronen has taken you through the financial results, I will come back to talk more about our strategic progress in recent months. Ronen?

Thank you, Mats, and good morning, everyone. I'll begin my comment on Slide 7. As Mats indicated earlier, the full year of 2023 marked another positive step in our expansion journey. We continue to execute against our mission and strategic plan as was reflected in our financial and operational results. In the fourth quarter, total revenue went down by 1.4% year-over-year to EUR23.4 million 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 EUR93.5 million continuing our growth momentum since the financial year 2021. The growth was mainly derived organically through our existing customer base launched in financial year 2021 and 2022, in particular the PAM and Turnkey Solution customers in the Netherlands, together with content offering and a solid revenue performance from the Wall Street Gaming Studio customers. From an operational KPI perspective, total wagering generated by games and content offered by the group during the quarter was up by 18.1% to EUR6.1 billion versus EUR5.1 billion in the same period last year. On a full year basis, total wagers were up by 26.6% to EUR22.4 billion versus EUR17.7 billion in the previous year. As you can see from the wagering chart on the right hand side, Bragg saw ongoing positive momentum from the fourth quarter of 2021, which demonstrate the engagement of our customer end users to the content we are delivering from our proprietary, exclusive and from aggregated third party studios. Gross profit for the quarter decreased by 7.3% to EUR12 million with gross profit margin decreased to 51.5%. The full year 2023 gross profit increased by 10.8% to EUR49.9 million with margin raising to 53.4%. The full year 2023 gross profit improvement is primarily the result of increased revenue performance in…

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 gains. We have introduced branded and custom product categories and we have successfully established or built on existing relationships with third-party content providers such as Gamut, Bluberi, and Incredible Technologies and we're 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 Fuze for iGaming, Fuze for sports betting and Fuze for lotteries, introducing new features and new functionalities to the platform, such as an AI powered recommendation engine and highly customizable jackpots tailored to operators' brands and user base, driving incremental revenue for both the operator and drive. We expect to generate meaningful recurring revenue alongside our aggregation, exclusive content, PAM 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 overexposure to the Dutch market through growing revenue in other high value markets such as Brazil, Belgium, and Canada. The uncertainty with BetCity that was hanging over Bragg has been resolved, and we've signed an extension of the BetCity PAM 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 and paying brands. Following the changes last summer at the board level, we initially focused on organization, structure and processes, and have started executing against new organizational blueprint. We have successfully resolved critical vacancies in the HR, legal and U.S. and EU commercial departments, and we'll continue to add expertise and talent to build the best teams in the business…

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

First one is maybe sort of a two part question here. Just wanted to better understand if you can provide some more color on with the revision of the BetCity agreement sort of how that impacted the economics both 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 previously talked about trying to target that 60% gross margin to 25% EBITDA margin. Is that still achievable with that reworked agreement?

Thank you. We have reworked the BetCity agreement and obviously renegotiated the term and renegotiated the both the managed services and content delivery part of the deal and extended the contract until 2025 and that has obviously impacted our margins. We expect the margins to be obviously in line with the provided guidance and then we expect growth in 2025 in line with our plans for increased deployment of content, increased deployment of application platform in PAM in various different markets that are regulated in United States and are going to be regulating in United States and Canada and other areas in 2024 and 2025.

And then you also highlighted that you paid off EUR3.7 million of the convertible debt. Do you expect to continue doing that in '24? And do you have an estimate of when you expect to have it paid off completely?

Ronen, can you take that please?

Yes, sure. Good morning, Neal. How are you doing? So in 2023, we paid $6 million, $4 million in cash, $2 million 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're investing in the business and we're doing this decision virtually on a monthly basis. But we have five more installments. We're 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.

Maybe the final one from me here. You did comment 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 sort of provoke the timing of announcing the strategic review? Did you get a specific inbound or is there anything worth noting on the timing of the formation of the special committee?

The strategic review is basically a result of an increased M&A activity across the space. And obviously, recent increased interest in Bragg, the Board decided that it's time to form a special committee that is going to consider and explore any strategic alternatives for the company.

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

I wanted to ask on the cadence of the proprietary games this year, 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 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 we're definitely seeing potential in our games being deployed in both American and European markets. And we're obviously hoping that we're going to get the next Egyptian Magic deployed from our portfolio in 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 and sort of post sales activities that are in place with certain clients. I think that it's also going to be very important to launch custom and exclusive games with selected operators in both markets and that is going to define the success of our content in 2024 and further in 2025.

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 2 years, and we're growing in this market. Obviously, we want to diversify away from it at the same time and we are seeing both opportunities in the market and same regulatory same time regulatory risk. Obviously, there have been new restrictions that have been put in place just recently. We see major opportunities in implementation of our Fuze 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 the priority list for 2024 and 2025.

And then I'll ask one more question and I'll pass the line. Just on 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 see that opportunity?

Yes, good question. So the Brazilian market is already huge. We won't be making any further investments into that market other than integrations with selected operators. We're 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 custom 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 and third-party exclusive games in the most efficient manner and win a share in the market that is going to satisfy our expectations.

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

A couple of questions. So you said you launched from a Superbet in Brazil. Are you providing sports betting and online casino content? Maybe you could just give us a few more details there?

No, we are not. We are providing aggregation services as a platform and we are providing Fuze as 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.

And then you talked about the fact that you would be live in two other Canadian markets in 2024. Are you -- do you plan to service them well, one, can you tell us what problems is? Two, do you plan to be servicing other operators that are servicing those provinces on a gray market basis? Or are you actually working with the Provincial Lottery Corp and servicing them?

We are planning to go live with operators that are regulated in markets, in these regional markets in Canada. We do not plan to service operators that are providing their services through offshore licenses.

And can you tell us what provinces you expect to be lining or title and term?

Can't comment on which promises that those are going to be.

Your next question comes from the line of Jordan Bender with JMP Securities.

Hi. This is Eric Ross on for Jordan. Thanks for taking our questions. But first, if the debt pay down will end in the next quarter and outside the strategic review, if we're sitting here a year from now and the macro environment was in similar or the same place, what would you see as the best usage of free cash flow?

Ronan, you want to take this question?

Yes, sure. Good morning. So from our perspective, currently, we utilize the cash, I think, in the most effective way. We took the loan in Berlin Partners loan in 2022 in September. We repaid over EUR6 million, we're spending another EUR2.5 million during the next couple of 5 months. The best use of the cash for us is investing in our product, investing in our technology, accelerate market that we want to be put in, deploy our content in the right speed to invest heavily in enhancing our PAM to get to the new customers, especially on the Czech Republic market, Canadian market, etcetera. That's the best use of our cash. So mainly investment, mainly accelerating investment in particular product that we want to put our foot on and to accelerate our product mix. As Mat said before, our proprietary content is one of the key. The PAM customers, it's and the PAM platform is the key. Fuze is the key, so we're investing heavily on that. That's our road map for 2024. And that literally answered the question what's going to be the best use of our cash.

And within the guidance, can you talk about what you expect for growth in third-party games versus proprietary?

Mat, do you want to take it? Do you want me to take it?

No, no. Just go ahead.

So we're expecting the growth of both of those particular product mix. As Mat indicated, our key strategic item in our road map is deploying our proprietary content. We see the traction. We see that how that is growing in the European market and also growing on the U.S. market. We are live now with 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 exclusive content providers, Mat said, Bluberi and Gamut, which is a long standing supplier. And we believe there's going to be quite much more acceleration, especially when we are deploying new markets like Brazil, market like we're enhancing in the Swiss market, LatAm market, Italian market and, of course, in this French market. So we expect that to grow. I would say everyone have a different starting point. If you look at the product mix slide, I think, slide number 8 in the presentation, there's a different way to each one of them. We are happy with the progress of proprietary. I believe that's going to be a very instrumental year 2024 for us. 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 and the Fuze platform will be able allow us to increase both of them slightly different growth rate. One is coming from a high base, one is 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 launch with 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 our deployment into existing operators in Europe and United States and successful placement and promotion of these games within these operators. It also depends on to a certain extent how fast some of the U.S. and other jurisdictions are going to regulate iGaming in the future. And then obviously, we're going to be using our aggregation and Fuze positions with these operators to aggressively place and promote our content with the use of tools such as tournament jackpots, recommendation engines, leaderboards, etcetera, etcetera.

[Operator Instructions] Your next question comes from the line of Jack Vander Aarde with Maxim Group.

So similar to what others have asked, but just looking at the 2023 revenue growth, it was up over 10%, and your 2024 guidance at the midpoint implies 13% growth. That's an acceleration. You've already outlined a list of growth developments to exhaustion. But what would you just attribute? Is there anything in particular that's the key driver of that actual growth acceleration? Or is it more due to maybe a slower back half of the year?

So the key driver for acceleration is going to be, like I said, deployment of proprietary and third-party exclusive content within the existing B2C operators and successful deployment of aggregation and Fuze platforms with client’s international operators or local operators in 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 PAM aggregation queues and proprietary third-party platform. So the acceleration is going to depend on their success as well.

Maybe just one more. You added more supplier licenses in 2023, regulators in Sweden, Gibraltar and Isle of Man most recently. Can you just speak to the importance of these new licenses in general and how they factor into your 2024 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 B2C operators that are licensed in these jurisdictions and are operating in the international environment. And we are going to continue to pursue any B2B licenses in any of the regulations that are or any of the jurisdictions that are going to regulate in 2024 and 2025. We have recently been approved in Peru. And if any -- if we are going to see any jurisdiction regulate iGaming or sports betting, we are going to be applying for the license. And following the growth of our B2C partners in those jurisdictions either through deployment of our PAM, deployment of our aggregation or deployment of third-party and third-party exclusive and proprietary content.

There are no further questions at this time. I will turn the call to Yaniv 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 Braggers, who made this possible. Without all those people who worked really hard throughout the year, we wouldn't have been here. So thank you all for your hard work, and we look forward to hosting everybody on our next call, our Q1 2024. Have a great morning, everybody.

This concludes today's conference call. We thank you for joining. You may now disconnect your lines.