Bragg Gaming Group Inc

TSX:BRAG

Earnings Call Analysis

Bragg Earnings: Growth and Strategic Exploration

Bragg has reported a year of growth, with full-year revenue increasing to EUR 93.5 million and a notable 26.3% jump in adjusted EBITDA to EUR 15.2 million. They ended Q4 with a reduced cash balance of EUR 8.8 million and have addressed a chunk of their convertible security liability, lowering it from USD 4 million to USD 2.5 million. Looking forward, Bragg issues revenue guidance for the next full year between EUR 102 million to EUR 109 million, suggesting a 9.1% to 16.6% growth, and adjusted EBITDA guidance ranging from EUR 15.2 million to EUR 18.5 million, potentially climbing by 21.7%. Amidst a vibrant M&A landscape, Bragg has formed a special committee to explore strategic alternatives.

Transformation and Strategic Enhancements

Bragg Gaming Group, under the new leadership of CEO Matevz Mazij, has undergone a transformative year aiming to align shareholder expectations with company operations and enhance shareholder value. With a focus on strategy, governance, and growth, the company is positioning itself as a top supplier in the iGaming industry, delivering casino games, technology, and services globally.

Expansion and Partnerships

The company has bolstered its market presence by securing agreements with major industry players such as Betsson, 888/William Hill, and PokerStars, and expanding into new territories like Belgium, Italy, Mexico, and Brazil, whilst deepening its roots in North America. These strategic moves showcase Bragg's commitment to broadening its distribution network and enhancing its content portfolio's attractiveness, particularly with its proprietary offerings and player engagement platforms.

Financial Performance and Outlook

Despite a slight dip in fourth quarter revenue by 1.4% year-over-year to EUR 23.4 million due to renegotiated commercial terms, the company's full year revenue grew by 10.4% to EUR 93.5 million. This growth, primarily organic, was propelled by existing customers and new ventures, like PAM and Turnkey Solution in the Netherlands. Total wagering surged, indicating robust customer engagement. Bragg's adjusted EBITDA for the year saw an impressive rise of 26.3% reaching EUR 15.2 million, mainly due to scaling revenue while controlling operational costs. Looking ahead, the company forecasts revenue growth between 9.1% to 16.6% reaching up to EUR 109 million and adjusted EBITDA up to EUR 18.5 million for the subsequent year, reflecting a confident strategic direction for continued expansion.

Earnings Call Transcript 2023-Q4

[Operator]

Hello, and welcome to the Bragg Gaming Group 2023 Fourth Quarter and Full Year Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Yaniv Spielberg, Chief Strategy Officer. Please go ahead.

[Yaniv Spielberg, executive]

Thank you, operator. Good morning, everyone, and thank you for joining our Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. I'm Yaniv Spielberg, Chief Strategy Officer for Bragg Gaming Group. I'll be hosting today's call alongside my colleague Mat, our CEO, [indiscernible] comment on our Fourth Quarter and Fiscal Year '23 and Ronen Kannor, our CFO, will review and discuss our Fourth Quarter and Fiscal Year '23 results. If you have not already done so, you can follow our Earnings Call Presentation from our website at investors [indiscernible] investors.bragg.group in the section called Latest Presentation. On this call, we'll review Bragg's Financial and Operating results for the Fourth Quarter of 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 I respond to you to various questions that constitute forward-looking information or future audience and financial information within the meaning of applicable securities law. Statements about expected growth, prospective results, strategic outlook 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 development and anticipated events, trends and regulatory changes that may affect the corporation and the 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 disclosures. With that behind us, I'd like to turn the call to our CEO, Mat. Mat?

[Matevz Mazij, executive]

Good morning, everyone. My name is Matevz Mazij, I'm Chairman and CEO of Bragg. I'm going to run through a 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 agreement 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 market, 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 Fuzeâ„¢ 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 PAM 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.

[Ronen Kannor, executive]

Thank you, Mat, and good morning, everyone. I'll begin my comments on Slide 7. As Mat 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 were down by 1.4% year-over-year to EUR 23.4 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 EUR 93.5 million, continuing our growth momentum since the financial year 2021. The growth was mainly derived organically through our existing customer base, launching 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, offset by the group during the quarter was up by 18.1% to EUR 6.1 billion versus EUR 5.1 billion in the same period last year. On a full year basis, total wages were up by 26.6% to EUR 22.4 billion versus 17.7 billion in the previous year. As you can see from the wagering chart on the right-hand side, [indiscernible] 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 EUR 12 million, with gross profit margin decreased to 51.5%. The full year 2023 gross profit increased by 10.8% to EUR 49.919 million, with margin raising to 53.4%. The full year 2023 gross profit improvement is primarily the result of increased revenue performance in all content products while recording slightly lower PAM managed services revenue. Adjusted EBITDA for the quarter was down 23.7% to EUR 2.8 million, with adjusted EBITDA margin reaching 11.9%. While the full year 2023 adjusted EBITDA saw a growth of 26.3% to EUR 15.2 million with improved margin to 16.3%. The yearly change in adjusted EBITDA margin is mainly as a result of scale in revenue while maintaining controlled investment in salaries and subcontractors and other operational costs as part of the company's strategy to expand software development, product and senior management functions. As of 31st of December 2023, cash balance ended at EUR 8.8 million with a positive net working capital position. Bragg provided an update on its expectations for 2020 full year revenue and adjusted EBITDA growth, with revenue expected to rise 9.1% to 16.6% to a range of EUR 102 million to EUR 109 million. And adjusted EBITDA is expected to increase up to 21.7% to a range of EUR 15.2 million to EUR 18.5 million. The midpoint of the 2024 revenue and adjusted EBITDA guidance ranges represent growth of 12.8% and 10.9%, respectively, over the reported full year 2023 revenue and adjusted EBITDA. We continue to execute against our mission and strategic plan. We are scaling up our business in line with both our revenue growth and continued movement in product mix as indicated in the right-hand side of the slide. Full year gross profit increased by 10.8% to EUR 49.9 million, with margin raising by 20 basis points to 53.4%. The fourth quarter has seen a decline both in gross profit to 7.3% to EUR 12 million and margin dropped to 51.5% due to revised commercial terms with a key strategic partner that has been reflected in the quarter, and it's mainly related to managed services and aggregation product. In the Fourth quarter, total gains in Content revenue segment amounted to EUR 18.2 million and represented 77.8% of the total revenue, which is comparing to fourth quarter last year, where the content revenue segment amounted to EUR 80 million and represented 76%. Proprietary content deployment is positively progressing, both in the US and EU markets by increasing both distribution and games performance constantly. As indicated in the previous quarter, Bragg is expecting an improvement in gross profit margins to take place in financial year 2025 by creating its higher-margin revenues coming from proprietary content, PAM and Turnkey solutions. Moving to Slide 9. Full year adjusted EBITDA amounted to EUR 15.2 million against an operating loss of 0.8 million. The gap was driven by the following noncash and exceptional items. Depreciation and amortization, the increase in intangible amortization is part of the Spin Games acquisition in June 2022, increased level of investment in software development and a change in the useful life of customer relationships. Share base payment, the charge for awards granted during the period, composed of DSUs and RCs and options. During the period, a one-off charge of EUR 0.4 million relating to this continued contracted relationship of employee was incurred. Exceptional costs is mainly associated with the discontinued contractor relationship of employees in the total value of $1.3 million. And again, of remeasurement of the fed consideration, mainly associated with the acquisition of Spin Games in June 2022 on the total outstanding deferred liability that was adjusted to reflect the changes in current fair value. Moving to Slide 10. As you all see on the slide, we ended the fourth quarter with a cash balance of EUR 8.8 million compared to EUR 11.3 million as of December 31, 2022, with outstanding liability of USD 4 million of convertible security. Post quarter end, the company made cash repayment of USD 0.5 million and USD 1 million settled through issuance of common shares, leaving an outstanding balance as of today at USD 2.5 million. We expect to continue exercising the right to pay down the existing convertible security subject to ongoing management assessment. Net working capital at the end of December 2023 ended at EUR 5.1 million, which is excluding deferred consideration and convertible debt, which compared to the EUR 6.6 million at the beginning of the year. From a cash flow perspective, the full year financial year ended December 2023, a total of EUR 11.7 million generated from operating activities with underlying performance reaching to EUR 13.6 million, offset by the movement in working capital and income taxes of EUR 1.9 million. A total of EUR 9.7 million invested in intangible assets, mainly related to the capitalization of software development costs to a total value of EUR 8.7 million and EUR 0.6 million to the other intangible assets during the period and at a total of EUR 4.2 million used in finance activity, which is predominantly related to the repayment of loans in relation to the convertible security to a total of EUR 3.7 million. Looking forward, management is projecting positive free cash flow from operations, while there is no CapEx or technology debt required in the business. With that, I will hand over the call back to Mat to continue with commentary on strategy and operation.

[Matevz Mazij, executive]

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 games. We have introduced branded and custom product categories, and we have successfully established our build on existing relationships with third-party [indiscernible] content providers such as GAMOMAT, Bluberi and incredible technologies, and we're seeing growth in the distribution of all of our content in regional markets throughout the US, Canada, LatAm and Europe. We have also started monetizing new opportunities with Fuzeâ„¢ for iGaming, use for sports betting, infused 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 Bragg. 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 signing 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 [indiscernible] 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 footprint. We have successfully resolved critical vacancies in the HR, legal and US and EU commercial departments, and we'll continue to add expertise and talent to build the best teams in the business in order to execute against our strategy. We have also implemented refined strategies for the US and Canada, while we initially only focused on proprietary and exclusive third-party content. And now we're also focused on aggregation and use platforms in both US and Canada, and we're seeing especially strong interest in use in both of these markets. I will talk about further strategic initiatives later in this presentation. Moving to Slide 13. I want to reiterate the key pillars that we have put in place to continue to drive revenue growth, improve our profit margins and generate value for our shareholders. We are focused on our proprietary and exclusive games road map. We have successfully scaled up production, launching 69 new exclusive titles in 2023, both from our own in-house studios and from in-demand suppliers such as Bluberi, Incredible Technologies, Sega Sammy Creation, [indiscernible] and others. With our ever-expanding games portfolio, we are building brand recognition in North America, Europe and LatAm. And we're leveraging our game production capacity to offer increasing numbers of operator exclusive custom and [indiscernible] games. Most recently, we launched Boardwalk Slots Bankers & Cash, our second custom titled procedures, pallets in Michigan and New Jersey. Furthermore, we are focusing on regulated market distribution growth with Tier 1 and Tier 2 operators remaining a key strategic pillar for us, allowing us to leverage our content portfolio by expanding its reach to more players worldwide. And in turn, we can offer scale in multiple regulated markets for these operators. We still see plenty of upside in large regulated markets such as US, UK, Italy and others where we have plenty of space to launch with new operators and to grow our share of wallet with existing ones. And we're very well prepared for markets that are currently going through regulatory reforms in Latin America such as Brazil, Peru and Mexico. And in Europe, where we see potential for growth in country spending regulations or are expected to further regulate such as Finland, France and Germany. Our promotional engagement and player journey platform use offers a differentiated product proposition and remains central to our strategy for growth, both on content, content delivery and [indiscernible]. We believe that Fuzeâ„¢ is a platform that is unique in the market as it works on a stand-alone basis or as a part of proprietary content and third-party exclusive content portfolio, aggregated content and sports betting portfolio and PAM.Fuzeâ„¢ is easy to use, allowing operators to launch multiple real-time cross product and cross channel engagement campaigns that are designed to significantly increase the most important KPIs such as lifetime value, conversion rates and retention rates. We feel that we are in a perfect position to leverage the capabilities of this platform to allow operators to create differentiated B2C products. We have already rolled out us with selected TPAM and aggregation customers, and we aim to license us as a stand-alone product in the US, Canada, LatAm and Europe. In addition to that, we are in a very good position to cross-sell and upsell all of Bragg's products such as aggregation, PAM and managed services. On the back of this opportunity as well as increased interest in our combination of aggregation and Fuzeâ„¢ toolset for Sportsbooks, we're creating new partnerships with sports betting platforms to create compelling new Turnkey propositions. We're also going to continue to refine our products and explore new segments such as iLottery and social moving forward. Lastly, our focus on recurring profitability expansion means that we aim to deliver a culture of continuous improvement, and we're going to leverage opportunities to introduce product development, automation and introduce product features that will allow our customers to further automate processes and become more efficient. We are implementing strict cost control measures and will seek to expand profit pools and profit margins, all with an aim of maximizing shareholder value. On this slide, I want to highlight that our broad offering of content, technology and services enables us to deliver customer solutions for our customers in different types of regulated iGaming market environments internationally. Our full Turnkey solution powered by the Bragg PAM and Bragg Hub, the content aggregation and delivery platform leads the market in the Netherlands where we showed that by being fast to adapt and certified technology in newly regulated markets, we can gain first-mover advantage and become the go-to local market expert. Our plan business is also making strides in the Czech Republic, and we are ready to offer our customers highly customized [indiscernible] and Turnkey solutions in regulated and newly regulated markets where the right opportunities arise. At the core of our technology offering is Bragg Hub, content aggregation and delivery platform with over 9,000 online casino games from all the top suppliers available to a single integration. Our aggregated portfolio is constantly updated with new games providers and the latest games with no extra work for our customers, and it all comes with our cutting-edge Fuzeâ„¢ engagement tools as a standard. The combination of a huge library of regularly updated games along with player engagement and experience enhancing features is a powerful proposition in the US and Canada and especially in newly regulated markets like Brazil, where we recently launched our aggregation offering with Superbet, while in Peru, where we recently became an approved supplier -- our localized options are in high demand. We also see strong demand from businesses such as state-run lotteries looking to upgrade their interactive offering with the latest negating content and promotional engagement and player experience features for their iLottery, casino and Sportsbook verticals. Lastly, and I'll talk more about this on the next slide. We are proud that in the last couple of years, we have ramped up our exclusive content offering, games built on our proprietary RGS. In 2021, we kicked off our proprietary content journey with the acquisition of Wild Streak Gaming, which provided an instant springboard in growing our creative portfolio mix with investing in technology and development teams to build a modern and flexible game development team. We began to roll out internal content in 2022 under the Atomic Slot Lab brand based in Las Vegas and at the same time, grew our European design team to kick off Indigo Magic launches. These investments began to produce a significant number of games in 2023 with 29 games released. More importantly, we have seen many of these internal titles performed well across various new markets where we are actively adding customers, including in the UK, Italy, Mexico and Greater Latin America. We continue to grow and refine our content and commercial teams and processes leading to an exciting portfolio in 2024, entering several new product categories. Also very important is the studio partnerships we have with a variety of companies, which we also expanded or introduced in 2023. Launching titles from Bluberi such as Devil's Lock as proven impactful in both European and North American markets. We expanded our partnership and increased the amount of releases from both Incredible Technologies and [indiscernible], along with introducing our first cycle with King Show Games and Sega Sammy Creation in Europe, both of which are being actively rolled out or in submission for the American market. GAMOMAT with its European heritage has proven valuable as we grew our relationships in markets such as Switzerland last year. The US iGaming landscape is incredibly exciting and constantly involving. We have a strong focus on the region and North America continues to be a key growth market for us. We have faced a few challenges as multiple operators have changed their PAM platform leading to delays with certain key customers and markets. And we continue to work through integrations, opening up our distribution further with several new planned launches over the coming months. Our North American strategy continues to be well received by operators that brand office need value proposition in the market with content that is recognized by players from a variety of partners from Incredible Technologies to Bluberi to Sega Sammy Creation to King Show Games and our internal studios would produce some recognizable land-based types and resonate well with players and operators in the US as well as Canada. The chart on the right-hand side of this page highlights the momentum we are starting to see in North American markets with the Bragg RGS rollout of new games from internal studios as well as from our partners are contributing to our growth here. And as we continue to launch games, we are building a baseline revenue stream, which continues to incrementally grow over the long term. Our growth potential remains significant. We are live with our newest games with one operator in Pennsylvania, but several integrations are in process in late stages of testing. This is a very important market as we can see the results from our historical Spin RDS content. We have multiple customers in New Jersey with go-live dates later this year and filling out the Michigan market operators ensuring we can go live with both standard online games as well as mobile iOS apps. We expect that Delaware will be online for us later this year. We also expect 2024 will bring meaningful growth in the Canadian market. There are multiple key operators to still roll out our games within Ontario, but equally exciting are the other Canada online partnerships in progress. We expect to be live in 2 additional Canadian provinces this year, and this will lay the foundation for an effort to seize as many opportunities in the Canadian market as possible and significantly expand our footprint. We remain bullish in our near-term growth opportunities in North America. And while no new markets are expected to open near term, our upside in the existing market is substantial, particularly as we look at expanding our content portfolio. Bragg expanded its content portfolio significantly in 2023. But in 2024, we will build on that momentum in multiple ways through key product strategies and capabilities. Understanding the data and building the right content for the right market and for the right segment is a critical part of this and our strategy of having localized and custom content in North America is proving its value. 2023 marked our first custom game with Caesars with an additional rollout already this year, but we have multiple operators in Europe where customization is providing unique opportunities to boost performance and strengthen our relationships and gain positioning. 2024, we'll also see our first brand extension opportunities from our internal content teams. We will build multiple brand extensions to Dragon Power, a very popular game in the United States market, along with Congo Cash due to launch later this year. These brand extensions highlight the fact we have games that resonate with the players and offer a great opportunity to build on that performance and player loyalty. In fact, we are also expanding our product breadth with our brands as we will be launching into new segments with our brands, including Dragon Power Keno and Egyptian Magic Keno. Further, we are combining our capabilities as we look to launch a customer branded table game later this year. 2024, we'll also see a new partnership in Europe where we will deploy our slot content with a live bonus features [indiscernible] in partnership with State Logic. Innovation is in our DNA, and we launched Connect and Collect games across multiple platforms. This innovative game mechanics has shown great initial results and we'll continue to launch games with this type of game [indiscernible]. Combined with innovations within the hold-and-respin segment such as Cogni Cash, Electric Jungle and Golden Treasures, plays well in the market as incremental innovation. Finally, 2024 marks a greater put between our internal studios and our Fuzeâ„¢ player engagement tool set to collaborate as we are launching our first collaborative products in Q2. This can bring it all together as bespoke promotions customized for our operators across our content is expected to drive our continued content performance and extend its life span. As I'm sure you will all be aware, we have seen an increase in M&A activity across the iGaming and sports betting space with some of the recent deals indicated on the right-hand side of the slide. Against this backdrop and following recent increased interest in Bragg, the Board confirms that a special committee chaired by Independent Board of Director, Don Robertson, has now been performed to consider and explore strategic alternatives for the company. These strategic opportunities may include a sale of the company or of this asset, a merger, financing or further acquisition of tech and content assets or any other strategic initiatives, but there can be no assurances that any transaction will be completed. So to summarize. We are pleased to report another year of growth with full year revenue rising 10.4% to EUR 93.5 million and adjusted EBITDA rising by 26.3% to EUR 15.2 million. Gross profit increased 10.8% year-over-year to EUR 49.9 million. And as you have seen, we have made good progress on organization and strategy, and we have the strategic pillars in place to drive growth with our diverse product portfolio, which is in demand in multiple different regulated iGaming markets globally. We are issuing full year revenue guidance in the range of EUR 102 million to EUR 109 million, which would reflect 9.1% to 16.6% revenue growth. With full year adjusted EBITDA guidance set at a range of EUR 15.2 million to EUR 18.5 million, representing up to 21.7% growth at the top end of the range. Lastly, following increased M&A activity in the market as well as increased interest in Bragg, a special committee has been formed, chaired by Don Robertson to explore strategic alternatives for Bragg. Thank you all very much for attending this Presentation of our Fourth Quarter and Full Year results. Now if you have questions, Ronen and I would be pleased to take them.

[Operator]

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

[Neal Gilmer]

I'm on for Gianluca this morning. First one is maybe sort of a 2-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've previously talked about trying to target that 60% gross margin, a 25% EBITDA margin. Is that still achievable with that reworked agreement?

[Matevz Mazij, executive]

So we have reworked capacity 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, we're 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 aggregation platform in PAM in various different markets that are regulated in the United States and be regulating in the United States and Canada and other areas in 2024 and 30 in 2025.

[Neal Gilmer]

And then you also highlighted that you paid off EUR 3.7 million of the convertible debt. Do you expect to continue doing that in '24? And do you have an estimate of when do you expect to have it paid off completely?

[Matevz Mazij, executive]

Ronen, can you take that, please?

[Ronen Kannor, executive]

Yes, sure. So yes, so in 2023, we paid $6 million, $4 in cash to in convertible in 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 literally on a monthly basis. But we have 5 more installments. We 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 that.

[Neal Gilmer]

Maybe the final one for 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 as 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?

[Matevz Mazij, executive]

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 terms for the company.

[Operator]

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

[Adhir Kadve, analyst]

I wanted to ask on the cadence of the proprietary gains this year, proprietary and exclusive games, so 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 a potential from being another Egyptian Magic or Dragon Power in there?

[Matevz Mazij, executive]

Thank you for your question. So we're definitely seeing potentially in our gains 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 and that's going to be launched in 2024. But I guess it's going to depend on 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 customer and exclusive games with selected operators in both markets, that is going to define the success of our content in 2024 and further in 2025.

[Adhir Kadve, analyst]

Okay. Excellent. And then there's 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 to defend your share? Will you try to take more share? Or how should we be thinking about the Netherlands market in 2024?

[Matevz Mazij, executive]

The Dutch market has been very important for us in the past 3 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 Fuzeâ„¢ 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 our priority list for 2024 and 2025.

[Adhir Kadve, analyst]

Okay. Great. 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 seize that opportunity?

[Matevz Mazij, executive]

Good question. So the Brazilian market is already huge. We won't be making any further investments into that market other than integrations with selective operators were integrated with the biggest operators in the market already. And all we have to do is execute against our strategy to deploy plays and promote content with those operators and deliver customer 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.

[Operator]

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

[David McFadgen, analyst]

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

[Matevz Mazij, executive]

No, we're not. We're providing aggregation services as a platform, and we're providing Fuzeâ„¢ 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.

[David McFadgen, analyst]

Okay. And then you talked about the fact that you would be live and 2 other Canadian markets in 2024. Are you -- do you plan to service them -- one, can you tell us the problem is to 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?

[Matevz Mazij, executive]

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.

[David McFadgen, analyst]

And can you tell us what promises do you expect to be live in outside of Ontario?

[Matevz Mazij, executive]

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

[Operator]

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

[Eric Ross]

This is Eric Ross on for Jordan. So first, if the debt pay down will end in the next quarter and outside the strategic review, where we sitting here a year from now and the macro environment was in similar or the same place. What would you see as the best uses of free cash flow?

[Matevz Mazij, executive]

Ronen, do you want to take this question?

[Ronen Kannor, executive]

Yes, sure. So from our perspective, currently, we utilize the cash, I think, in the most effective way. We took the loan in the [indiscernible] loan in 2022 in September. We repaid over $6 million. We are standing another $2.5 million during 2020 -- during the next couple of 5 months. The best use of the cash for us is investing in our product, investment in our technology, accelerate market that we want to be foot 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, et cetera, that's the best use of our cash. So mainly investment, mainly accelerating investment in particular product if 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 in the pen platform is the key field is the key. So we're investing heavily on that. That's our road map for 2024, and that literally answers the question what's going to be the best use of our cash.

[Eric Ross]

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

[Ronen Kannor, executive]

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

[Matevz Mazij, executive]

No, no. Just go ahead.

[Ronen Kannor, executive]

So we're expecting the growth for 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 US market. We are live now with the majority of the operators in the US market, and we can see this traction month after month. We also have a very good partnership with exclusive content providers, as Mat said, Bluberi and GAMOMAT, which is a long-standing supplier. And we believe there's going to be quite much more acceleration, especially when we are deploying a new market like Brazil, but market later enhancing in the Swiss market, LatAm market, Italian market and of course, in the French market. So we expect that to grow. I would say everyone has a different starting point. If you look at the product mix slide, I think Slide #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 very instrumental year 2024 for us. But both of them have also decent type of product mix and costs associated with. But the combination of the 2 and the ability to deploy our aggregation platform in the Fuzeâ„¢ platform will be able to allow us to increase both of them, slightly different growth rate. One is coming from a high base, when it coming from a low base. But that's roughly what we're expecting in 2024.

[Matevz Mazij, executive]

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 2 or 1 of the 3 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 US and other jurisdictions are going to regulate iGaming in the future. And then obviously, we're going to be using our aggregation and fuse positions with these operators to aggressively place and promote our content with the use of tools such as Tournament jackpots, recommendation engines, Leader boards, et cetera, et cetera.

[Operator]

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

[Jack Vander Aarde, analyst]

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 like the key driver of that actual growth acceleration? Or is it more due to maybe a slower back half of the year?

[Matevz Mazij, executive]

So the key driver for acceleration is going to be, like I said, deployment of proprietary and third parties to the content within the existing BC operators and successful deployment of aggregation and infused platforms with clients, 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 the acceleration will spend on successful launches of these operators that are going to obviously launch PAM aggregation Fuzeâ„¢ and proprietary and third-party platform. So the acceleration is going to depend on their success as well.

[Jack Vander Aarde, analyst]

Okay. That's helpful. And maybe just one more. You added more supplier licenses in 2023, regulators in Sweden, Gibraltar and I 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?

[Matevz Mazij, executive]

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're going to see any jurisdiction regulate eye gaming or sports betting, we're 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.

[Operator]

There are no further questions at this time. I will turn the call to Yaniv for closing remarks.

[Yaniv Spielberg, executive]

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 call the brothers who made us possible without all those people who work 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.

[Operator]

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