Gaming Innovation Group: Strong Media and encouraging P&S outlook - ABG

Q2 EBITDA 1% below cons on Sportsbook and Platform miss
Decent start to Q3 with Media sales up 37% y-o-y
No change to FY Media guidance, P&S '25 guidance in line with cons


Media keeps delivering: 18% organic growth in Q2

GiG Media (i.e., Gentoo Media) continues to deliver solid results, especially compared to sector peers, with organic growth of 18% (19% in Q2'23) and an adj. EBITDA margin of 49% (47%). Media revenue was just below our expectations, but slightly above Factset consensus, while adj EBITDA came in 4-5% above us and cons on a higher-than-expected margin. The Google update seems to have had a limited impact on revenue thus far, in line with our expectations, and GiG mentions that while some sites have been negatively affected (like casinotopsonline.com, a key brand), sites such as AskGamblers and Time2Play have been benefited to offset. Moreover, AskGamblers’ revenue was up 58% and 21% y-o-y and q-o-q, respectively, while KaFe Rocks (recently acquired) grew by 20% sequentially with both delivering strong EBITDA margins. As such, we keep being encouraged by GiG's accretive M&A strategy. July's revenue was up 37% y-o-y which is a bit lower than our pre-Q2 growth for the full quarter (48%), but remember that it is a limited period of time, and that July is likely the smallest month in Q3, so the figure can be volatile for such short period. The guidance has not changed (not mentioned), so we expect the EUR 125-135m in FY'24 revenue guidance to remain, which is in line with consensus (EUR 129m).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/gaming-innovation-group/Equity-research/2024/8/gaming-innovation-group---strong-media-and-encouraging-ps-outlook--/