Bragg Gaming Group (NASDAQ, TSX: BRAG) has decided to retract its guidance for 2026 due to a 12% decrease in second-quarter revenue. The company acknowledged that its stand-alone business was performing below the bottom end of its previous revenue forecast.
Revenue in Q2 dropped to €22.9 million ($26.1 million) from €26.1 million ($30.6 million) in the previous year. Despite this decline, adjusted EBITDA remained relatively stable at €3.5 million ($4 million).
Bragg recorded a net loss of €2.9 million ($3.3 million), compared to €1.8 million ($2.1 million) in Q2 of 2025.
The company cited uncertainty following its recent acquisition of Drayton International as the reason for withdrawing its full-year outlook. CFO Robbie Bressler confirmed that Bragg had been performing below the lower end of its revenue guidance even before the acquisition.
“We are experiencing increased revenue pressure,” Bressler stated. “Through our cost-cutting efforts, we have managed to maintain our EBITDA margin within our expected business performance.”
Brazil, Croatia Impacts on Growth
Bressler highlighted various factors contributing to the revenue pressure, including challenges in Brazil where suppliers are opting to integrate directly with operators instead of going through Bragg.
Regulatory changes in Croatia have also had a more significant impact than anticipated, especially regarding customer acquisition and advertising restrictions.
In contrast, North America showed strong performance. Revenue from Bragg’s proprietary content in the US and Canada saw a 44% year-on-year increase and a 25% increase from Q1.
CEO Matevž Mazij emphasized the importance of proprietary content as Bragg’s most profitable product and the US as its key market.
Bragg is optimistic about the potential of its recent $9 million acquisition of Drayton, completed entirely in shares. Drayton provides Bragg access to five game studios, over 100 proprietary titles, and exposure to the US advanced deposit wagering market, which operates in over 30 states compared to traditional iGaming’s seven.
Year of Transition for Bragg
These results come amidst significant changes at Bragg. The company announced a further 19% reduction in its global workforce in July, following an earlier restructuring in January.
These cost-cutting initiatives are expected to generate about €10.5 million ($12.1 million) in annualized savings. Bressler noted that compensation costs had already decreased by 14% year-on-year, with the full benefits expected to be more evident from Q4 onwards and into 2027.
“We have implemented the necessary changes to reduce costs,” Bressler confirmed. “We are continuously evaluating for more optimization opportunities to cut costs further.”
Following Mazij’s failure to win re-election to the board at the June AGM, gaming investor Matt Davey joined as non-executive chairman after the Drayton transaction.
Davey considers the current restructuring as just the beginning, emphasizing that Bragg’s immediate progress will be primarily measured by cash generation.