Gaming Innovation Group Q4’20: First comment – Commercial Progress and Tailwind for Media
Redeye Research Note 2021/02/23
Four deals were signed by GIG during the fourth quarter, and a deal with Playstar was signed after the ending of the fourth quarter. The majority of these deals will go live in the second half of 2021 but covers four years that provide recurring revenue with higher margins over a medium long-term period. GIG also signed a letter of intent with a German iGaming operator to go live with a revenue share model.
Essentially, GIG performed in line with our expectations on all levels. The only differentiation was that media outperformed our estimates and compensated for lower numbers from the Platform Services. GIG showed strong performance in the media segment as the google search algorithm changed and was favorable for GIG´s websites. Meanwhile is the underperformance due to discontinuing the white-label clients and the impact of the new German regulations.
The trading update for January showed that the normalized revenue was up 40% YoY.
Redeye recognizes the strong performance in the share of GIG over the last few weeks and will come with an updated view on the valuation to reflect the newly signed deals in the estimates.