Bragg Gaming Group Inc (BRAG) 2023 Q4 法說會逐字稿

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.

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 Matevž, our CEO, for comments on our fourth quarter and fiscal year '23, and Ronen Kannor or our CFO, who 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.bragg.group, in the section called latest presentation. On this call, we'll review Bragg's financial and operating results for the fourth quarter and fiscal year 2023. Following our prepared remarks, we'll open the conference call to a question and answer period.

I started the call with some brief cautionary remarks regarding certain statements that may be made on this call. Certain statements made on this conference call and our responses to various questions may constitute forward-looking information or future-oriented financial information within the meaning of applicable security 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 condition, business prospects or opportunity, future plans and strategies, technological developments and anticipated events, trends and regulatory changes that may affect the corporation and its subsidiaries and their respective customers and industry.

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 achievements 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, Matevž. Matevž?

Good morning, everyone. My name is Matevž 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 gaming industry. As Ronen will show 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 Chief Executive Officer, and since then, we have been busy implementing a series of strategic and organizational changes, all with the aim of aligning shareholders' expectations with company operations and unlocking shareholder value.

I'm going to talk more about strategy later in this presentation, but first let's turn to slide 5 to take a look at some key operational highlights from the full year of 2023 and from the fourth quarter.

During the year, we signed global Tier 1 agreements with Betsson, 888 / William Hill and Pokerstars. And we continue to expand our content distribution network by entering new markets, including Belgium, Italy and Mexico. In each case launching with the local market levers.

We also continued our content rollout in multiple North American gaming markets, including with several operators in New Jersey, Michigan, Pennsylvania on Connecticut. Our exclusive content portfolio continues to resonate well, and we have seen a particularly positive trends with this content in North America from the fourth quarter onwards.

Meanwhile, we also continued to build our content business in the international gaming market, such as the United Kingdom, Spain and Switzerland. In the fourth quarter, we were pleased to launch with Superbet in Brazil with our proprietary content as well as with Casino aggregation and our Fuze Player Engagement platform.

During the quarter, we expanded the distribution reach of our newest games and technology in New Jersey with our latest launch with BetMGM, and we were pleased to announce in the fourth quarter that we successfully renegotiated our time extension agreement with BetCity in the Netherlands, including continued content and product delivery.

After Ron has taken you through the financial results, I will come back to talk more about our strategic progress in recent months. Vernon?

Thank you, Matevž, and good morning, everyone. I'll begin my comments on slide 7. As Matevž indicated earlier, the full year of 2023 marked another positive step in our expansion journey. We continued to execute against our mission and strategic plan, as was reflected in our financial and operational results.

In the fourth quarter, total revenue went down by 1.4% year-over-year to EUR23.4 million, reflecting revised commercial terms with one of our key strategic partners agreed during the quarter. Full year total revenue was up by 10.4% reaching EUR93.5 million, continuing our growth momentum since the financial year 2021.

The growth was mainly derived organically through our existing customer base launch in FY2021 and 2022, in particular, the PAM and turnkey solution customers in the Netherlands, together with content offering and a solid revenue performance from the whilst key gaming studio customers.

From an operational KPI perspective, total wagering generated by games and content offered by the group during the quarter was up by 18.1% to EUR6.1 billion versus EUR5.1 billion in the same period last year. On a full year basis, total wagers were up by 26.6% to EUR22.4 billion versus EUR17.7 billion in the previous year.

As you can see from the wagering chart on the right-hand side, Bragg's 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, aggregated third party studios.

Gross profit for the quarter decreased by 7.3% to EUR12 million, with gross profit margin decreased to 51.5%. The full year 2023 gross profit increased by 10.8% to EUR49.9 million, with margin rising 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 and managed services revenue.

Adjusted EBITDA for the quarter was down 23.7% to EUR2.8 million with adjusted EBITDA margin reaching 11.9% below the full year 2020 adjusted EBITDA. So growth of 26.3% to EUR15.2 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 control 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 December 31, 2023, cash balance ended at EUR8.8 million with a positive net working capital position. Bragg provided an update on its expectations for 2024 full year revenue and adjusted EBITDA growth with revenue expected to rise 9.1% to 16.6% to a range of EUR102 million to EUR109 million.

And adjusted EBITDA expected to increase up to 21.7% to a range of EUR15.2 million to EUR18.5 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 EUR49.9 million, with margin rising by 20 basis points to 53.4%. Q4 has seen a decline both in gross profit of 7.3% to EUR12 million and margin drop 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 EUR18.2 million and represented 7.8% of the total revenue, which is comparing to Q4 last year with the content revenue segment amounted to EUR80 million and represented 76%.

Proprietary content deployment is positively progressing both in the US and EU markets by increasing both distribution and gains performance constantly. As indicated in the previous quarter, Bragg is expecting an improvement in gross profit margins to take place in FY2025 by creating its higher margin revenues coming from proprietary content Pam and turnkey solutions.

Moving to slide 9. Full year adjusted EBITDA amounted to EUR15.2 million against an operating loss of EUR0.8 million. The gap was driven by the following non-cash and exceptional items, depreciation and amortization. The increase in intangible amortization as 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 relationship.

Share-based payments, the charge for awards granted during the period composed of DSUs and RSUs and options during the period, a one-off charge of EUR0.4 million relating to discontinued contract and relationship of employee was incurred.

Exceptional costs is mainly associated with the discontinued contractor relationship of employees in the total value of EUR1.3 million and a gain of remeasurement of deferred 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 currenct fair value.

Moving to slide 10, as you all see on the slide, we ended the fourth quarter with a cash balance of EUR8.8 million compared to EUR11.3 million as of December 31, 2022, with outstanding liability of $4 million of convertible security.

Post quarter end, the company made cash repayment of USD0.5 million in USD1 million settled through issuance of common shares, leaving outstanding balance as of today at USD2.5 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 EUR5.1 million, which is excluding deferred consideration and convertible debt, which compared to the EUR6.6 million at the beginning of the year.

From a cash flow perspective, the full year financial year ended December 2023, a total of EUR11.7 million was generated from operating activities with underlying performance reaching to EUR13.6 million, offset by the movement in working capital and income taxes of EUR1.9 million.

A total of EUR9.7 million invested in intangible assets, mainly related to the capitalization of software development costs to a total value of EUR8.7 million and EUR0.6 million to the other intangible assets during the period and at a total of EUR4.2 million used in finance activities, which is predominantly related to the repayment of loans in relation to the convertible security to total of EUR3.7 million.

Looking forward, management is projecting positive free cash flow from operations. While there is no CapEx of technology debt required in the business. With that, I will hand over the call back to Matt to continue with commentary on strategy and operation.

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 or build on existing relationships with third parties of content providers such as [Golden Nugget], Bluberi and incredible technologies.

So we're seeing growth in the distribution of all of our content in regional markets throughout the US, Canada, Latin and Europe. We have also started monetizing new opportunities with Fuze for a gaming. Fuze for sports betting and Fuze for lotteries, introducing new features and new functionality to the platform, such as an Ideal Power's recommendation engine and highly customizable jackpots tailored to operated brands and user base, driving incremental revenue for both the operator and drive, we expect to generate meaningful recurring revenue alongside our aggregation, exclusive content from managed services.

We have successfully developed a commercial plan to grow revenue outside of the Netherlands and will 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 best city that was hanging over brag has been resolved, and we've signed an extension of the Pepsi bottling 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 Entain 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 improvements. We have successfully resolved critical vacancies in the HR, legal and US and EU commercial departments and will 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 Fuze platforms in both US and Canada. And we are seeing especially strong interest in Fuze in both of these markets. I will talk about further strategic initiatives later on 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 roadmap.

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, (inaudible) 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 exclusives, custom & exclusive games. Most recently relaunched Boardwalk Slot Bankers and Cash, our second custom title for Caesars Palace 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 to regulatory reforms in Latin America, such as Brazil, Peru and Mexico.

And in Europe, where we see potential for growth in countries pending regulations or are expected to further regulate such as Finland, France and Germany. Our promotional engagement and player journey platform Fuze offers a differentiated product proposition and remains central to our strategy for growth, both on content, content delivery and PAM fronts.

We believe that Fuze is a platform that is unique in the market as it works on a standalone basis or as a part of proprietary content and third-party exclusive content portfoliom, aggregated content and sports betting portfolio and PAM.

Fuze 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 product. We have already rolled out Fuze with selected key PAM and aggregation customers. And we aim to license Fuze as a standalone product in the US, Canada, LatAm and Europe. In addition to that, we are in a very good position to cross-sell and up-sell 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 Fuze 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 [lottery] 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 custom solutions for our customers in different types of regulated gaming 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 certify our technology in newly regulated markets, we can gain first mover advantage and become the go to local markets.

Our PAM business is also making strides in the Czech Republic, and we are ready to offer our customers highly customized PAM 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 through a single integration. Our aggregate portfolio is constantly updated with new game providers and the latest games with no extra work for our customers and it all comes with our cutting-edge Fuze engagement tools as a standard.

The combination of a huge library of regularly updated games, along with player engagement and experience enhancing features, it 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 content and promotional engagement and player experience features for the lottery 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 take off Indigo Magic launches. These investments began to produce a significant number of games in 2023 with 29 games release.

More importantly, we have seen many of these internal titles performed well across various markets where we are actively adding customers, including in the UK, Italy, Mexico and greater Latin America. We continued 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 variety of companies, which we also expanded for introducing 2023. Launching titles from Bluberi, such as those lots of proven impactful in both European and North American markets.

We expanded our partnership and increase the amount of releases from both Incredible Technologies and women's health, along with introducing our first titles with King show games and Sega Sammy creation in Europe, both of which are being actively rolled out for in submission for the American market.

[Camelot] 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 pump platforms leading to delays with certain key customers and markets. But 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 and brands offers a unique 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, potential gains and our internal studios, which produce some recognizable land-based titles 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, roll-out 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 very important market as we can see the results from our historical spin ideas 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 the 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 still rollout gains within Ontario, but equally exciting are the other Canada online partnerships in progress. We expect to be live in two additional Canadian provinces this year, and this will lay the foundation for an effort to seize the many opportunities in the Canadian market 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 markets 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 marks our first custom game with Caesars with an additional rollout already this year. We have multiple operators in Europe where customization is providing unique opportunities to boost performance and strengthen our relationships and gain position.

2024 will 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 stronger 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 will also see a new partnership in Europe, where we will deploy our slot content with a live bonus feature [superwheel] in partnership with Stakelogic. Innovation is in our DNA, and we launched Connect and collect games across multiple platforms.

This innovative game mechanic has shown great initial results, and we'll continue to launch games with this type of game mechanic, combined with innovations within the whole, the Reefton segments such as Corporate Cash, Electric Jungle and Golden treasures plays well in the market as incremental innovation.

Finally, 2024 months or greater for us between our internal studios and our Fuze 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.

As I'm sure you will all be aware, we have seen an increase in M&A activity across the gaming and sports iBetting space with some of the recent deals indicated on the right-hand side of this slide.

Against this backdrop and following recent increased interest in Bragg, the Board confirms that a special committee chaired by independent Board Director Don Robinson, has now been performed to consider and explore strategic alternatives for the company.

These strategic opportunities may include a sale of the company or have this asset paid merger financing for 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 EUR93.5 million and adjusted EBITDA rising by 26.3% to EUR15.2 million. Gross profit increased 10.8% year-over-year to EUR49.9 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 gaming markets globally.

We are issuing full year revenue guidance in the range of EUR102 million to EUR109 million, which would reflect 9.1% to 16.6% revenue growth. With full year adjusted EBITDA guidance set at a range of EUR15.2 million to EUR18.5 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 Instructions)

[Neal Gilmer], Haywood Securities.

Good morning. I'm on for Gianluca this morning. So, thanks for taking my questions on. First one is maybe sort of a two-parter question here. Just wanted to better understand if you could provide some more color on with the revision of the Betcity agreements, 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 than you've previously talked about you trying to target that 60% gross margin and 25% EBITDA margin. Is that and still achievable with that reworked agreement?

And thank you. So, we have reworked capacity agreement and obviously really good 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'll live with the provided guidance and then we expect growth in 2025 in line with our plans for increased deployment of content, increase deployment of application platform and PAM in various different markets that are regulated in the United States and are going to be regulating in United States and Canada and other areas in 2024 and further in 2025.

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

Ronen, can you take that, please?

So yeah, so in 2023, we paid EUR6 million full in cash to in convertible bond in converting into shares. We expect to continue to exercise the right to pay down the existing convertible, subject to ongoing management discussions and cash flow needs.

We investing in the business and we're doing the decision literally on a monthly basis, but we have five installments. We have [EUR2.5 million]. And management together with the Board trying to make the right decision for the use of cash of repaying or converting into that socket.

Thank you. Maybe just final one for me here on you did comment a little bit in your prepared remarks with respect to the strategic review. Just wanted to see if there's any other additional insight that you can share as far as sort of provoke the timing of announcing the strategic review. Did you get a specific amount or is there anything worth noting on the timing of the formation of the special committee?

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

All right. Thanks very much. I'll pass the line.

Adhir Kadve, Eight Capital.

Hey, guys. Thanks for taking my questions. I wanted to ask on the cadence of the proprietary games this year, proprietary exclusive games, as you said, 29 potential games coming out this year, similar to last year, maybe from the ones you had released last year.

Are there any learnings that you can apply to your newer launches? And are there any games that are really kind of outperforming your expectations? I guess what I'm asking is, is there the potential for being another Egyptian Magic for Dragon Power?

Yeah, Thank you for your question. So, we're definitely seeing potential in our gateways being deployed in both American and European markets. And we're obviously hoping that we're going to get to the Egyptian Magic from our portfolio in 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 of 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. And that is going to define the success of our content in 2024 and further in 2025.

Okay, excellent. And then there 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 trying to defend your share? Will you trying to take more share? Or how should we be thinking about the Netherlands market in 2024?

The Dutch market has been very important for us in the past two years, and we're growing in this market. Obviously, we want to diversify away from at the same time, and we are seeing of both opportunities in the market and same regulatory sentiment inventory risks.

Obviously, there have been new restrictions that have been put in place. Just recently, we see major opportunities in implementation of our Fuze platform with selected customers. We see opportunities in growing our share of wallet with selected prime and aggregation clients and all in all the Dutch market is going to remain very high on the priority list for 2024 and 2025.

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 to see that opportunity?

Yeah, good question. So the Brazilian market is already huge, we won't be making any further investment into investments into that market other than integrations with selective operators. We're integrated with the biggest operators in the market already. And all we have to do is execute against our strategy to deploy place and promote content with those operators and deliver 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 when a share in the market that is going to satisfy our expectations.

Excellent. Thanks, guys. I'll pass the line.

David McFadgen, Cormark Securities.

Yeah, hi. Thank you. Couple of questions on. So you said you launched Superbet in Brazil. Are you providing sports betting and online casino content maybe to just to ask a few more details there?

No, we're not we're providing aggregation services as a platform, and we're providing Fuze as a platform and obviously providing delivery of third-party content and providing third party exclusive content and proprietary content to operators that are active in the market.

Okay. And then you talked about the fact that you have the live and to other Canadian markets in 2024, do you plan to service some while one? Can you tell us what says to on the plant and the service from other operators that are servicing those balances on a market basis, are you actually working with today eventual lottery Corp and servicing them?

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

Okay. Can you tell us what benefits you expect to be relying on time and on time?

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

All right, okay. Thank you.

Jordan Bender, JMP Securities

It is Eric Ross on for Jordan. Thanks for taking our questions. First, as a debt paydown will end in the next quarter and outside the strategic review, if we were sitting here a year from now and the macro environment was in similar same place, what would you see as the best uses free cash flow?

Ronen, you want to take this question?

Yeah, sure. Good morning. So from our perspective, currently, we utilize the cash, I think is most effective way. We took the million partners loan in 2022 in September, we repaid over EUR6 million. We're spending another EUR2.5 million during 2024 -- during the next couple of months.

The best use of the cash for us is investing in our product business and technology accelerate market that we want to be for [Tim] 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 Matevž said before, our proprietary content is one of the key independent customers into the pen platform is the key field is the case, are we investing heavily on that data roadmap for 2024. And that mutually answer the question, what's going to be the best use of our cash.

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

Matevž, do you want to take it?

No. Just go ahead.

So we expect the growth of both of those particular product mix. As Matevž indicated, our key strategic item in our roadmap 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 majority of the operators in the U.S. market, and we can see this traction month after month we also have a very good partnership with the exclusive content providers, Matevž said Bluberi and gamma, 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 like we had seen in the Swiss market, LatAm market, Italian market and of course, in the switch market so we expect that to grow.

Obviously everyone has a different starting point. If you look at the product mix, slide number 8 in the presentation, there's a different way to each one of them. We are proud. We are happy with the progress of proprietary.

I believe there's going to be very cement instrumental year 2024, but both of them have also different type of product mix and cost associated to. But the combination of the two and the ability to deploy aggregation platform in the Fuze platform, we'll be able allow us to increase both of them slightly different growth rate. One is coming from a high base, one coming from a low base, but then that's roughly what we're expecting in 2024,

If I may just add to that. So, the growth of the third-party content revenue depends largely on our ability to integrate and our ability to launch with of these larger operators going into the newly regulated markets where we are usually one of the two or one of the three aggregation platforms for these operators. And then it depends on the growth of these operators in this market.

The growth of the proprietary content largely depends on our deployment into existing operators in Europe and United States and successful placement and promotion of these games within these operators. It also depends on them to a certain extent how fast some of the US and other jurisdictions are going to regulate gaming in the future.

And then obviously, we're going to be using our aggregation and Fuze positions with these operators to aggressively place and promote our content with the use of tools such as tournament, jackpots, recommendation engines, leaderboards, etcetera, etcetera.

(Operator Instructions) Jack Vander Aarde, The Maxim Group.

Okay, great. Good morning, guys. Thanks for taking the questions. Similar to what others have asked, but just looking at the 2023 revenue growth, it was up over 10%. On your 2024 guidance at the midpoint implies 13% growth.

And that's an acceleration you've already outlined a list of growth developments had to accept exhaustion, but I'm 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?

Thanks. So the key driver for acceleration is going to be, like I said, deployment of proprietary and third-party exclusive content within the existing B2C operators and successful deployment of aggregation and Fuze platforms with 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 is going to depend on successful launches of these operators. Some that are going to obviously launch PAM aggregation tools and proprietary and third-party platform. So the acceleration has been dependent on their success as well.

Okay. That's helpful. And maybe just one more. You added more supplier licenses in 2023 regulators in Sweden, Gibraltar and Isle of Man most recently. Can you just speak to the importance of these new licenses in general and how they factor into your 2024 outlook? And are you actively pursuing additional licenses as we speak next?

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 on any B2B licenses in any of the regulations that are core and the jurisdictions that are going to regulate in 2024 and 2025.

We have recently been approved in Peru. And if we're going to see any jurisdiction regulate or 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 planned deployment of our aggregation or deployment of third-party and third party exclusive and proprietary content.

Okay, great. Thanks for taking my questions.

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

Well, thank you, everyone, for joining the call this morning. We had another very successful year and before we sign off. I want to thank all the bloggers who made this possible without all the people who worked really hard throughout the year 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 and a great morning, everybody.

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