Gaming Innovation Group Inc

OSE:GIG

Earnings Call Transcript 2022-Q1

[Hjalmar Ahlberg, analyst]

Hi, and welcome to the Q1 presentation of Gaming Innovation Group, which will be presented by CEO, Richard Brown; and CFO, Tore Formo. My name is Hjalmar Ahlberg. I'll be hosting the Q&A session. [Operator Instructions] With that, I will leave over the word to Richard. Please go ahead.

[Richard Brown, executive]

Perfect. Thank you very much, Hjalmar. And good morning to you all, and welcome to Gaming Innovation Group's Q1 2022 report. Just a very brief introduction about Gaming Innovation Group. We're a global iGaming company with a reach across the high-value areas of the B2B supply chain. The business itself is listed on both the Oslo Børs and Nasdaq exchanges. We have a global reach, both across the businesses. We're operating in more than 25 different regulated jurisdictions as of today, with an additional 10 in the pipeline. We've completed the acquisition of Sportnco from the 1st of April, and now we have 610 employees spread across offices in Malta, Denmark, Latvia and Spain, and in addition to that in France.

Very briefly, as I mentioned before, we are a B2B supplier within the iGaming industry, providing end-to-end solutions based on a number of various different innovative technology stacks. We have our Platform business. This offers a state-of-the-art player account management system. This operates in a multitude of more regulated markets and incorporates a significant number of different items required in order to provide a first-class iGaming experience to the end user. And this includes such things as a real-time data Platform, Games, Payment, KYC Aggregation, Structures, Regulatory Reporting, Player Safety Systems, Bonus Engines, Gamification Layers, Frontend and CMS. So a significant amount of structures within that providing a high-quality experience for the end user and for the operators utilizing the platform.

Our Media business is performing exceptionally well at the moment, refers high-quality players directly to B2C operators via multiple number of digital marketing channels, working across both the casino and Sportsbook verticals in a number of global markets. These website assets often act as a guide or a trusted referral source to the end user or players. We also now provide a Sportsbook solution end-to-end via the acquisition of Sportnco. This includes the full betting engine, odds trading, and risk management platform, and a mobile first front end with native app development incorporated within that.

Due to the fact that we operate in particular on the Platform and Sportsbook businesses with a number of land-based retail operators moving into the online space for the first time as markets regulate, we also provide what we call Managed Services. Now this supports the online operation all the way through from customer support, payments operations, compliance, player safety, all the way through to CRM and digital marketing services. Now of course, this is particularly helpful for retail businesses moving into the online space who don't necessarily have the expertise to operate online or haven't historically. As an example of this, we have a large retail casino customer that actually only employs one person in digital and we provide everything else.

We combine all of the products agnostically from a sales perspective. We have clients that take just Media Services. We have clients that take just the Platform and build out on top of it. And then we have, as I mentioned, some customers that take an entire full turnkey solution.

We're very pleased with the results that we've delivered in Q1. Revenues came in at EUR 19.1 million, 27% up year-over-year. The EBITDA numbers came through at EUR 6.5 million, which is up 32% year-over-year and corresponds to an EBITDA margin of 34%. The EBIT was also up 53% year-over-year to EUR 2.9 million. So I'm very pleased with how we've developed, and we continue the positive trend. That being said, we still very much believe this is just a start for this business and what we can achieve in the years to come.

Just to touch very briefly also on our overarching strategy within the group. We drive the business via 3 main growth pillars. Firstly is market expansion. That obviously, of course, in the Platform and Sports Betting is the number of certifications we have; but also in the Media business, the number of markets that we operate assets within, whether that be via paid marketing, paid digital marketing or via publishing assets within those markets. That, of course, generates opportunity across the businesses to drive future growth as we continue to expand into a number of different markets.

All of the different areas of the business also work predominantly with reoccurring revenue streams. This means that we're referring players in Media predominantly on revenue share. And in the Platform, we take a percentage of the NGR. So as the customers grow, so do our revenue streams, providing sustainable and strong growth over periods of time.

We also focus a lot on product across the business in order to be able to drive that market share. Now whether that be from developing first-class product experience that attracts customers to the platform or Sportsbooks solutions that we provide or within the Media that attracts, retains and gives the end users or players a quality product experience to know where to find the best gambling hubs.

We have a global approach in terms of markets, as I mentioned several times, and we'll continue to dive into that as we go through in the presentation with a strong focus on regulated markets. We have a diverse approach to high value and high earnings quality areas of the B2B gambling industry. Our Media business is fast and allows us to be agile, creating a quick time to market. The Platform business gives long-term earnings quality.

Due to the dynamic within the iGaming industry and the retention rates, et cetera, being a key driver, there is a consistent and constant customer acquisition requirement from the B2C operators, and we see that as being a long-term strategic position for the Media business to have success in.

Likewise, the Platform and Sportsbook businesses have multitudes of elements on a macro level that enable growth positioning. There's a continued shift from retail to online, driven by regulation in a multitude of markets. Now that fragmented regulation structure also increases technical barriers to entry. And with GiG and Sportnco combined, we're able to approach those regulated markets due to the quality of product and the ability to operate in said regulated markets. So as that continues to develop, both of those business areas are well-positioned for future growth.

Just to follow on an update on the Sportnco acquisition. So we completed that on the 1st of April. I have to say, working with the teams there for the last 30, 40 days directly and the post-merger integration plan is a real pleasure to welcome them into Gaming Innovation Group. And we have reaffirmed the quality of both product and the individuals involved, and we really look forward to continuing striving towards building those businesses out together.

For those of you unaware or unfamiliar with Sportnco, it's a high-quality B2B supplier focused very much on Sportsbook and PAM in a number of regulated markets worldwide. We've been focused obviously in Q1 on the actual completion of the transaction. And now our efforts and energy is turned entirely to the post-merger integration to secure the synergies and operational performance that we really believe that the combined businesses will be able to deliver. The combination of the businesses are making an aggressive move towards a larger near-term, but also long-term addressable market with a combined product offering. And we really believe that there are meaningful revenue synergies and a significant ability to reduce our operational expenses over periods of time.

Just some highlights. It is an end-to-end Sportsbook solution. They have more than 50,000 prematch events, 25,000 live events, over around 5,000 leagues and 50 sports. The team there have built up extremely strong products and extremely strong trading capabilities, enabling them to operate successfully in very difficult jurisdictions such as France or Portugal with a great deal of success. So we look forward very much to the integration. The technical integration of the product we anticipate to be completed towards the end of Q3, where we can start then to onboard new clients with the products as well. So very excited to move forward into this stage of the acquisition process.

As we've talked about before in previous presentations, we really believe that the combined entities will drive both strategic and operational performance across the businesses and its units. The Platform will have an increased scale, an increased addressable market, further diversification of revenues and geographical reach, especially into high-growth markets such as Latin America, where we will now have a Sportsbook that is a proven Tier 1 operator with a number of highly competitive markets. It's competitive now also as a group towards Sportsbook only geographies, and there are a number of markets. Obviously, several of the U.S. states are good examples of that. But there are also other examples in Latin America, Europe, France being the obvious one, which is Sportsbook only geos.

We can also now compete in RFPs and sales processes for Sportsbook-led customers, which is something that historically, due to Gaming Innovation Group's focus on casino, provides a very complementary element. And this, we believe, will drive significant revenue synergies and cross-selling across the business.

We have also identified and structured, and we still believe that we will derive significant cost synergies from the merger and the combination of the 2 business units. We will see central functions with improved cost efficiency and operational capability, with combined market coverage expanding so greatly that operationally allows us to lower OpEx and CapEx requirements going forward. And we previously anticipated that we would see cost savings kind of in the region of around EUR 5.5 million to EUR 6 million. We believe that, that number kind of sits now at the low end of a range and we're probably targeting our annualized savings in the region of EUR 8 million over the next kind of 4, 5 quarters that we believe that we'll be able to deliver as we progress with the integration, we progress with the maturity of the business and the technology stacks that we're developing are enabling us to be more and more efficient over time.

I touched on it several times, but I want to drive down because it is such an important part due to the fragmented nature of regulation, these increasing barriers to entry. The fact that we've now got access to more than 25 different regulated jurisdictions is an incredible footprint for the business to operate in. We have another 10 or so also in progress or in the pipeline for development, which would take us up to around 35. And importantly, for us, Sportnco has a very strong product and footprint in the Latin American and Southern European markets, in particular, LatAm, which has a high growth rate. And we anticipate good things from that region in the future.

Just touching on here, again, this large footprint that we have as existing should enable us to operate very well. And we can also continue to drive forward into a number of new markets over the periods of times to come.

Just to touch on obviously what's an element of this kind of the area of the business is the number of contracts, not only that we signed in terms of new, but also the value of extending contracts, especially with our material clients. In Q1, we actually extended one of our more material contracts with Betsson through to the end of 2025. We've also signed this year a full turnkey solution provision with a U.K. Tier 1 retail casino. SkyCity, as announced this morning in the report, has also extended the contract through to May 2025. We signed an agreement with Betway, taking the Platform and Sportsbook into Portugal. And yesterday, we announced that we have signed with Full Game, one of the only regulated license holders for iGaming and Sportsbook in the African market of Angola. This is a very proud moment for several reasons. Firstly is that it's the first time that we signed a contract where we are combining both GiG's product proposition and service proposition with Sportnco. So it's a very nice thing to do very quickly after the acquisition actually closed.

Secondly, it also gives us a first entry point into the regulated iGaming market in the African continent, which we believe will also, in the longer term, be a high-growth area for the business as that market matures and develops. We've also seen, after only the first 30 days, that now of the combined sales pipeline from the 2 companies, actually more than 40% is with a combined product offering. So we anticipate that, of course, to expand over time in terms of percentage of the offering across both product sets, but we're very pleased with that initial start.

I will now touch a little bit more deeper into our Media business. Firstly, before I continue, what an incredible performance this unit has had not only in this quarter but on a consistent basis over the previous year or so. And that is a result of the product that the teams are working tirelessly and with a great deal of effort in order to deliver the continued enhancement of that product. I know the business channels that they operate in and the market expansion. So they should be tremendously proud of the effort, as am I, around the results we've delivered, which is a result of the work over the last 2 years and continues to be a very strong driver within the group.

We reached all-time high quarterly revenues, EBITDA and First Time Depositors. Exceptionally proud and pleased with the results. With Q1 revenues came in at EUR 14.1 million, up 40% year-over-year and 10% quarter-over-quarter. Now this is all organic growth derived from new market expansion and enhancement of product. The EBITDA margin was at 49%, resulting in an EBITDA of EUR 6.8 million, up 49% year-over-year. And both Paid and the Publishing departments reached all-time highs in revenues during the quarter at 39% and 41% year-over-year, respectively.

I continue with our strategy to have a bulk of revenues coming from long-term revenue share and this accounted for 59% of revenues during the quarter. The marketing compliance software that has been developed, GiG Comply, signed one new client during the quarter and re-signed 2 existing clients.

Just to touch on how one of the main operational KPIs of FTDs or First Time Depositors, which is the number of customers that we are referring to B2C operators to make deposits, ended at 69,800, just shy of 70,000, which is a 60% increase year-over-year and 15% up versus Q4. Especially pleased with this considering Q1 is normally a little bit weaker in terms of seasonality, but we continue to drive the business forward by these new market entries. We see 5 new markets entered during the first quarter and 9 U.S. states in Q1.

Media Services is continuing to invest in both its marketing spend. We see a very strong ROI on the spend over time. And as we've talked about before, because we're working on revenue share, what we tend to do is that, that spend is made and the revenue builds then over time. And we're very pleased with how that's developing, and we continue to focus with a very laser precision in terms of the ROI of each campaign that we run. We're also investing in the technology and the staff and the people there in order to continue to pursue the multitude of growth opportunities there are by expanding the markets that we're in, but also expanding the reach of the products that are already set within the asset portfolio.

The strong performance in development has continued into April, where we have another all-time high in player intake, up 70% compared to the previous year. I will talk a little bit about how the growth has also been driven by new markets and how it's been structured and how that's developed over time. I've kind of talked about that a little bit in the past, but to provide some more clarity and pictures here about how that's developing over time. The growth is driven by new markets, but also, importantly, by taking further market position and share in our existing core markets. However, the new markets such as the Americas, North America and South America is increasing its overall share of revenues in First Time Depositors. We currently have 13 licenses in the U.S. and are qualified to do business in 20 different states there.

Our Media revenues in the Americas increased by 200% year-over-year and 40% quarter-over-quarter. This increasing share of revenue from 8% in Q1 2021, where obviously relatively low, to now up to 17% in Q1 2022. As I said at the beginning of this slide as well, however, that we've also seen meaningful growth in our existing or more traditional markets such as the Nordics and Northern or Central Europe. So 36% up year-over-year. Of course, the share of revenues declined to 60% as the growth from the Americas and new emerging markets continues to push through. But again, very pleased that the growth isn't only driven by new markets, but by an increasing share in our existing markets. Tremendous performance from this particular business unit during the last periods.

Just to touch now also on the business update for the Platform unit. We see some very strong underlying business growth, excluding the discontinued white labels and also the premium fees related to the divestiture of our B2C businesses, historical revenues actually increased by 20% year-over-year. And as you can see from the graph, on the bottom right there, if we look on our last 12 months run rate, the business has gone from EUR 11.9 million run rate over the last 12 months to EUR 15.9 million in this year. Again, this kind of underlying business growth and focus area for the area of the group is driven by new client onboardings, new market access and the growth of existing client database.

Revenues, however, were impacted during the quarter on an overall basis by the high migration away from our platform in the latter part of Q4 and the exit of the Dutch market also just during Q4, which impacted comparables on a total level, revenues came in at EUR 5 million. EBITDA came in at minus EUR 0.3 million, a result of that continued expansion and investment into the growth that is driving the underlying business growth that you can see in the graph on the bottom right. We've also entered several markets that are of high cost in terms of entries in the last couple of periods, including 3 North American markets.

To touch also on the integration pipeline, 2 new brands were launched during the quarter. We have 3 additional projects that were completed during Q1, and we're just waiting to go live from clients. We now have Software-as-a-Service brands live on the platform at the end of Q1, which is an increase of 19% versus the period last year. We've talked about this in previous presentations, but these SaaS contracts, once they go live, there is a rate ramp period with the most meaningful contribution of those contracts, which normally span around 5-plus years, actually coming in the kind of midpoint onwards of those contract durations. While the first couple of years do make positive contributions, however, they start to ramp up and each operator ramps at slightly different speed. But as you can see, from that underlying business growth, we continue to build that really sustainable revenue source over the periods to come.

I've touched on it several times, so I will go quite quickly here, but we've actually increased our market certification within Gaming Innovation Group by 55% year-over-year. We continue to drive that forward. However, with the addressable market that Sportnco is getting, bringing us up to a total of 25, we're also able to be very selective and very mindful of how we approach market expansion.

Just to also add some flavor, we have a couple of highlights from those kind of 10 that were in progress over the next kind of 12, 24 months. We have Ontario going live in the next few months. We're also entering another regulated Southeastern European market. I can't comment specifically which one, but we've seen a really good deal of success in that region of -- around Croatia before with some previous clients in Croatia, Romania, et cetera. So we're very excited about moving into that region again in with a little bit more force.

I touched on it before, moving in first time into African regulated markets, which we believe will be a long-term ability to be able to expand within that structure over the coming years. We're also certifying for 2 further U.S. states and anticipate, potentially towards the end of the year or beginning of next, going into the Netherlands as well as that market starts to become open with a number of operators sitting currently in the cooling-off period. So we can anticipate there being a high demand for that market over the next kind of 12 months, in which we're excited about moving towards as of today.

Just to summarize some events post the end of the quarter. Obviously, we touched on it before, but we completed the acquisition of Sportnco from the 1st of April. And the team's focus now has moved entirely on to execution of that post-merger integration plan that we have and tremendously excited to move into that phase of the business combination. The group has signed 3 new contracts across Platform and Sportsbook. And that sales pipeline is building well and building momentum across both service sets.

Again, Media continues to perform, I mentioned earlier, 70% up year-over-year in terms of the number of First Time Depositors generated and overall a very positive trend. We see that there's continued work into new markets, product launches and product upgrades. We're also very pleased, and as I've mentioned before, it is very nice also for the team to receive external recognition for the work that they put in over the period. And GiG Media won the best casino affiliate at the iGB Awards in London in April. So incredibly pleased for the team to get some further recognition for all of the tremendous work that they put through there.

April has also developed positively on a group level. Revenues are up 42% compared to the same period last year and 28% organic growth.

And just to summarize, overall, GiG has delivered all-time high in revenues with strong double-digit growth in revenues, EBITDA and EBIT. The Media's performance is exceptional, reaching all-time highs across a number of financial and operational KPIs and has continued with launching into new markets and building on top of that existing asset portfolio. The platform's underlying business development is growing and going strong. We see a lot of the work going through in the future positioning of that being very positive. And we have, of course, completed that Sportnco acquisition, which will give us significant opportunities for both revenue growth and also meaningful cost synergies and improvement to the operational performance over the next 12 to 18 months.

Now we've positioned ourselves, we believe, for multiple growth opportunities across diverse revenue streams and in an increasing addressable market and have an opportunity to continue to focus on improving our operational performance.

With that, I would like to thank you for your time this morning, and I can pass back over to the team at Redeye for the Q&A.

[Hjalmar Ahlberg, analyst]

Thank you for the presentation. Maybe I'll start with the trading update question on that. Do you have -- can you give any flavor on the kind of mix there? Maybe if you can give us some information about, did you have a big positive impact from the opening of the Ontario Market or something that impacted the April number for the growth?

[Richard Brown, executive]

No, it's nothing specific in terms of opening up. We're actually not -- we're going live in the Ontario market with our Platform a bit later on. We have some clients that are in the application process as of today. So it wasn't the launch of a particular market or anything that has driven that growth. It has just been the continued steady improvement of the overall group's performance.

[Hjalmar Ahlberg, analyst]

Got it. And looking at the Media segment for this quarter, you continue to do very well. You showed us some numbers for North America and South America, which just seemed to grow quite fast, but from small numbers. But you've also been growing in the Nordics and Europe. Can you talk a bit of how you're able to grow in these markets, which are typically a bit slower growing than other newer online gambling markets?

[Richard Brown, executive]

Yes. I think, again, what the team and the strategy that we set out there is that, of course, we look at new markets and there is significant upside to a number of those markets that are growing in Latin America or in North America as well. But those European markets remain significant in terms of size. So by the team focusing on the position and improving that quality of products and the assets that they build, they're able to actually take market share. And while potentially there isn't the same kind of macro growth in online gambling in those particular markets, we're able to carve out more and more position with by the investment and the knowledge and the experience and the execution that the team are able to execute towards developing those products, both from a technical perspective, but also from a content, UX experience, and optimization of those various different marketing spends, channels, assets themselves. So it's a combination of factors that have enabled us to be able to perform very well in those traditional markets.

[Hjalmar Ahlberg, analyst]

And you also saw the profitability coming up a bit for the Media segment this quarter, whereas I mean in 2021, maybe you invested a bit more in growth. Do you see margin come back down a bit as you continue to grow? Or do you think this was kind of a lift up that will remain for this year and beyond?

[Richard Brown, executive]

I mean we're talking about maybe like a 3 percentage move in the EBITDA margin. So I think we will always identify when there is opportunity to invest. And that's one of the things that the team are very good with in the Paid Media segment as well. We have a lot of upfront marketing that, because we work on revenue share, then pays off over time. We're seeing, of course, that return on ad spending improving because we lifted up the marketing spend towards the end of last year. That has then driven a margin expansion this year as we've retained the same level of marketing spend, but the efficiency improved. We will always be opportunistic if we see an opportunity to pursue further growth. We will invest in doing so. There is a long runway of multitude of markets and constant requirement for players. So we are able to be able to identify those and move forward with it.

So yes, it's a kind of -- I'm not going to say it's going to go like up or down in that sense. We will always just identify in that range of where we're talking about 45% to 50% or something like that. Of course, over the longer term, we believe that, that will overall continue to build and improve over time. But on a quarter-by-quarter basis, we would anticipate it to be able to kind of flex our marketing muscle when we see opportunity. And conversely, if we see that the return on ad spend isn't there, we're able to scale back marketing spend at quite a rapid pace as well. And because we're not working -- majority is revenue share, our revenues can still grow even if we pull back on our marketing spend, because we're not relying on the CPA trigger to generate the revenue income. So it's a very good dynamic that we have that allows us to be able to control that margin as well.

[Hjalmar Ahlberg, analyst]

And coming back to the FTDs, which was -- I mean you've seen high growth of paid FTDs. What's behind this kind of growth? And there was also a question about marketing channels. Do you see any new trends, for example, Facebook's paid marketing going forward?

[Richard Brown, executive]

Yes. I think in terms of Paid, I mean, we've had a number of markets that regulated over the last kind of 24 months or so that have enabled us to enter new markets quite quickly. Due to the technology that sits behind the Paid marketing division and the scalability of that particular area, we're able to kind of move quite quickly into various number of markets through that. We've also seen, in terms of the number of channels we work still predominantly with display networks and Google PPC as the main channels. However, we start to see better performance in social because we are very focused around return on ad spend or ROAS. Sometimes that's not as efficient channel; however, we start to see that developing more positively potentially, especially as the number of markets you can operate with Facebook in kind of developing along with regulation, that will enable us to be able to be more flexible there.

[Hjalmar Ahlberg, analyst]

And coming back to Sportnco, which you have now owned for a month, you showed us some interesting things. But for example, the combination of deals, that 40% of the pipeline is combined deals, so to say, combined offers. Can you give us some more flavor on your kind of takes for this month compared to what you saw ahead of the acquisition of the company?

[Richard Brown, executive]

Yes, I think the thing for me was that you have a feeling as well when you're doing M&A, you're obviously about the teams and structures and how complementary they will be. But of course, you never know until they actually happen, but I can only speak incredibly positively about the attitudes across both GiG and Sportnco and towards collaborative nature, both across the commercial or sales pipeline, but also the technical integration parts, human resource elements. We have a lot of work to do as well. It's not something that you can just run within 100 days and then it's done. This is an ongoing project that we will continue to invest our focus in, because we know that the combined businesses together over the next 2 to 3 years are going to have an incredibly strong value proposition and combined entity strength.

[Hjalmar Ahlberg, analyst]

And a follow-up on that, about the synergies. You increased the synergies from EUR 5 billion to EUR 6 million to EUR 8 million. Do you have any kind of concrete examples of why you increased this? And do you have any time frame for when we see this materialize?

[Richard Brown, executive]

Yes. So I mean there's a couple of reasons behind it. One is I think that the technology stacks have developed over time that allow us to be more efficient as well. A lot of work and investment has gone into that from the teams over the preceding kind of 12 months. So we see an ability there to be able to kind of structure ourselves in a more efficient way.

We can also see obviously that the number of new markets required has decreased meaningfully than it was historically prior to both businesses being separate. That also gives us some operational leverage there. We also see that we have really strong compliance functions within Gaming Innovation Group that therefore creates more efficiencies in structures that Sportnco have and the same with information security. So it's not necessarily one thing, it's a very broad structure that we can identify. And we've just seen that we believe that over a kind of 12- to 18-month period, we'd be able to execute that with some more force than we had previously anticipated.

I think also when you are in due diligence phases and strategy structures, you're obviously very clear on what you want to achieve. But then as you start to learn the businesses more and start to position them and actually start to do the integration, you're like, okay, well, there's actually more upside here than I believed that there would be.

[Hjalmar Ahlberg, analyst]

Got it. And for the Platform business and the pipeline outlook, if we saw some new launches this quarter, how does this look for this year? And what kind of pace of new launches of new brands to expect? And I guess, is it dependent maybe more on the brands than what you have in your sales pipeline by yourself?

[Richard Brown, executive]

Yes, a little bit dependent on the brand launching time lines. However, I have to be honest as well, like we start to also work very much for Sportnco, the integration lines there and stuff like that. So in terms of the numbers, we start to combine the entities rather than see them as individual units. So it kind of depends we would anticipate an improved rate in terms of launches, of course. But we're moving into some very difficult jurisdictions from a technical perspective, which we're very comfortable and confident in, that we will believe we'll go through, but also combining that with some that we're already operating in.

And again, because of the structures that we have, for instance, obviously, the U.K. Tier 1 retail customer, we believe we've been operating in the U.K. for a number of years and successfully with a number of different clients. So we believe that, that, for instance, is a relatively low barrier to entry, but they still have to get their license for online. We need to do omnichannel integration and stuff like that. So again, we will focus on the quality of delivery and not necessarily always on the actual specific number of them.

[Hjalmar Ahlberg, analyst]

And you mentioned that the Dutch market had some negative impact in Q4. Could you say anything else about maybe which brands were affected? And when do you see this kind of revenues coming back from Dutch markets?

[Richard Brown, executive]

I'm not going to say which brands because that's our clients' information and stuff like that. But we had some that were operational, that we're driving some performance. And then obviously, there was a bit of a shock that the regulator changed their approach so drastically right at the end of October, I believe it was.

So I don't see that those -- it wasn't huge, but it was an impact, let's put it that way, that kind of just impacted the overall top line of the Platform segment. I do believe that we will see new opportunity going into the regulated markets, not necessarily with the same clients perhaps, because they will have to rebuild from a low base again. But we believe that there's opportunity in the sales pipeline coming up in the future to launch new clients in that particular market.

There's obviously -- due to the nature of this cooling off period, there was a low number of active brands as of today, and we will drive through. And then on our Media business, we haven't -- we actually stopped taking or referring Dutch traffic more than 2 or 3 years ago. So there, again, it's just an upside opportunity for us to rebuild the assets and the footprint that we once were very strong in that market 2, 3 years ago that now we can continue to invest, and we're actually investing in that market from a Media perspective that over time we'll be able to ramp that back up. But again, it's a little bit of a slower process we did to focus on the quality. So it's not to make any shortcuts that will be detrimental to the long term.

[Hjalmar Ahlberg, analyst]

And you recently entered Angola as a new market, which is the first market in the African continent. Could you talk about how much kind of work it was to -- I mean, was it a totally new regulation? How quick were you to enter this market from the decision, so to say?

[Richard Brown, executive]

Well, we actually just signed that contract yesterday. So the work will kind of kick off from today. I think there's obviously an element of localization of product towards that market. But what we're very pleased with in terms of that structure, it's being able to win the contract as well based off the combined offering of Sportnco and Gaming Innovation Group, we'll be able to provide Managed Services and a number of different things that, of course, increased the actual contract value to us, but also gives us some very strong operational experience in the African continent.

Now of course, not all countries are like that, but we will at least start to be able to understand that. Again, I think potentially, like Latin America was a few years ago, it's pretty nascent. There's a lot of retail betting, but there will be a trend and a growing trend. You've seen markets such as Kenya and such developed very positively post regulation in terms of market size and use of online. So we would anticipate similar. And there's also restricted licenses in Angola. If I'm not mistaken, there's only 4 or 5. So again, we believe that finding one of those partners to work with and the background of the companies that are supporting that, Valisa, a very large retail business in Spain, et cetera. So we believe that there's some real strength in there.

I mean, it will take some time, I anticipate, for that to come into fruition in terms of contribution. But yes, an important strategic market, I think, again, not necessarily in 12, 18 months, but for the longer term. I think you also see a number of other businesses performing well there in terms of B2C operators and then that's kind of growing as well, so people put more investment. So I think it's the right time for us as well to start moving into that region.

[Hjalmar Ahlberg, analyst]

Got it. And moving back to the Media business, there was a question from the web here asking if you can tell anything about what the mix was from a Tier 1 market after this or non-Tier 1 market after this.

[Richard Brown, executive]

We don't really necessarily look at it like that way. And it's actually not keep your hand in front of me, but we don't necessarily think about it in terms of Tier 1 or Tier 2, because we're working consistently on both revenue share and optimization of deals. So what we often do and what the team are very good at, we built a specific data platform for the Media business that enables us to analyze the return of each First Time Depositing customer. Even on a per page of referral basis what that enables us to do is to analyze, okay, where the best return is, from which partner. Now it may be a customer is not performing, doesn't retain customers very well, therefore, we can up the fixed fees they convert or their CPA amounts in order to combat a negative churn element that there may be.

And vice versa, if we see it as a customer that retains its customers very well or the players very well, then we will see kind of continue to optimize that structure. So rather than necessarily thinking about it as Tier 1. And also that definition, like we operate in some markets like local markets where potentially the Tier 1 in that local market, such as Belgium, for instance, but not necessarily global Tier 1. So not a definition that we normally attach to our Media business in terms of the customer mix. But on an overall basis, we have a number of Tier 1 customers that make up significant portions of our revenue. But that being said, no customer of ours is bigger than, say, 10% overall of the revenues in the Media segment.

[Hjalmar Ahlberg, analyst]

Right. I had another on the Media, I mean, U.S. or North America, South America has been a market that has been gaining some traction as you've shown in your numbers. And particularly for North America or U.S. market, do you see that you have now -- I mean, I guess you've historically been able to grow the traffic, but not maybe monetize enough. Do you think you have found a way how to monetize the North American market or the U.S. market now?

[Richard Brown, executive]

I think we're getting there, like I mean we believe that we have a huge runway in front of us in the North American market and we're building slowly. We didn't acquire any asset set. These are all been built organically over the last 2 years. We've been going slow and steady in terms of the investment. We've started to scale that up. We're starting to learn, which is the most appropriate structure for us to work in, both the product optimization, et cetera, even the partners and the conversion rates there. So I think we're improving that all the time and the team is doing a very good job, but there's still an awful lot for us to go out and achieve in that particular segment or that region, I should say.

[Hjalmar Ahlberg, analyst]

Right. And moving over to the Platform business and Sportnco in the U.S., any update on that, maybe both on your current Platform and when do you think Sportnco can be live generating revenue in the U.S. not only free to play, so to say.

[Richard Brown, executive]

Yes. I mean, so we're about to launch a client into New Jersey, which we're very excited about. We're also doing Pennsylvania later this year, which we've also eagerly anticipated from an iGaming or online casino perspective, the 2 strongest markets. Everything else is kind of Sportsbook led. So we're very pleased with being able to reenter with some real positivity there. We will do the integration, as I mentioned, with Sportnco into the GiG PAM system or Platform systems over the kind of next 3 to 6 months. We are actively pursuing various different RFPs for the U.S. with the Sportsbook-led proposition. So in terms of time lines, there's nothing set in stone, as I say, but we're actively pursuing it as of today.

[Hjalmar Ahlberg, analyst]

And you mentioned you reported that you look at potential more structural lease like the acquisition of Sportnco or some questions here on the web on how you see maybe splitting up Media and Platform business. Can you give some more flavor on that maybe?

[Richard Brown, executive]

Yes, I think -- I mean, we're always identifying best possible ways to create shareholder value within the company. We will always evaluate what structures, whether that be listing environment, whether that be M&A, strategic, et cetera. So those are always under constant consideration by any business, to be honest. And we're no different from that. So we continue to -- but we obviously continue as we are today with a very strong value proposition across the business. But we will always evaluate the different structures that are possible and that would generate shareholder value.

[Hjalmar Ahlberg, analyst]

And another question, M&A. I mean we've seen some continued high pace M&A or at least M&A in the operator space. How does this kind of impact you? And do you see risk that more consolidation could be negative for a supplier? And what's your kind of strategy to limit risk of maybe losing clients if there is a merger between 2 of your clients, let's say?

[Richard Brown, executive]

I think there's a couple of things. Obviously, like one is the fact that we're able to operate in so many regulated markets that have very stringent and very difficult barriers to entry from a technical perspective, gives us some edge in terms of there. Also, while I understand there are elements to that in structures, we still believe that our product offering and the ability to operate in these number of markets gives us a very strong position and retention rate of our existing customers and potential future customers being very strong. So of course, there's an element of risk to it. But I believe that what we do and the strategy that we have will help mitigate that significantly.

[Hjalmar Ahlberg, analyst]

And regarding your financial targets. I mean you gave us an update for the guidance this year, and you also reiterated your long-term guidance of at least 40% EBITDA margin. And considering, I mean, combining Sportnco, which has a very strong profitability, and the increase of the synergies, it seems a bit low to be at 40%. Any comment on that?

[Richard Brown, executive]

I think we retain them for the time being, those kind of long-term targets. I think one of the things we will obviously do is we'll refine -- I mean it has only been 40 days since we did the acquisition. So I think we will probably refine them to burst out some more longer-term targets as the year progresses once we have a better understanding not only of kind of the next 24 months, but also where we would anticipate the business in that kind of the 3-, 5-year period as well.

[Hjalmar Ahlberg, analyst]

Okay. Great. I will leave that for the final question for the day. So thank you very much for your time, Richard.

[Richard Brown, executive]

Thank you very much. Pleasure to have you all this morning. Thank you for your time.