Bragg Gaming Group (NASDAQ:BRAG) reported lower second-quarter revenue but maintained adjusted EBITDA as the company prioritized margin expansion and cash flow over top-line growth, while advancing a restructuring program and completing its acquisition of Drayton International.
Revenue for the second quarter of 2026 was EUR 22.9 million, down 12% from EUR 26.1 million a year earlier. Adjusted EBITDA was unchanged at EUR 3.5 million, while adjusted EBITDA margin expanded to 15.4% from 13.3% in the prior-year quarter. Gross profit declined to EUR 11.8 million from EUR 13.7 million, with gross margin narrowing to 51.7% from 52.7%.
Cost reductions and restructuring
Bragg said it has completed several restructuring initiatives and is beginning to see their effects in its cost base. Gross compensation costs before capitalization fell 14% in the second quarter compared with the same period in 2025, according to Bressler.
On July 9, Bragg announced a further reduction of roughly 19% of its global workforce. The measure is expected to generate about EUR 6 million in incremental annualized cash savings. Together with a restructuring announced Jan. 8, the initiatives are expected to produce total annualized savings of approximately EUR 10.5 million.
Bressler said the savings will begin to have a more meaningful effect in the fourth quarter and into 2027, after the company moves through one-time severance costs. He also said Bragg continues to look for further opportunities to optimize costs.
For the first six months of 2026, revenue totaled EUR 48.5 million, down 6% from EUR 51.6 million in the first half of 2025. Adjusted EBITDA was flat at EUR 7.5 million.
Regional trends and proprietary content growth
Bragg reported strong performance from proprietary content in North America. Revenue from proprietary content deployed by U.S. and Canadian operators rose 44% year over year in the second quarter, driven by wider distribution and the volume and quality of its games, Mazij said. He described proprietary content as Bragg’s most profitable product category and called the U.S. its most important market.
Results were pressured by several regional and product-specific developments. Revenue in the Netherlands declined 14% year over year, reflecting the expected roll-off of legacy turnkey contracts as customers migrated away from Bragg’s player account management platform. In Brazil, revenue was flat as some suppliers established direct integrations with operators rather than using Bragg as an intermediary.
Bressler said the Brazilian business that moved away was relatively low margin, limiting the impact on profitability. He also cited regulatory changes in Croatia affecting customer acquisition and advertising, as well as softer activity at Wild Streak Gaming, where Bragg has historically developed content for other providers and studios to distribute.
While reported gross margin was 51.7%, Bressler said certain one-time items affected the quarter. Excluding those items, he said gross margin would have been approximately 55.7%, which he characterized as more reflective of the company’s run-rate business and its shift toward higher-margin proprietary content.
Drayton acquisition prompts guidance withdrawal
Bragg completed its acquisition of Drayton International on July 22 for $9 million, paid entirely in shares. The transaction also resulted in the conversion of 751,445 subscription receipts into common shares and warrants, releasing approximately EUR 1.1 million to the company.
As of June 30, Bragg had EUR 3.3 million in cash. The company also renewed its revolving credit facility with Bank of Montreal for an additional year on terms consistent with the existing arrangement.
Bragg withdrew its previously issued 2026 revenue, adjusted EBITDA and adjusted EBITDA margin guidance because integration planning for Drayton remains at an early stage. Bressler said the prior guidance was based on Bragg’s standalone operations and the company did not yet have a reasonable basis to forecast the combined business.
Before withdrawing the outlook, Bragg was tracking below the low end of its standalone revenue guidance range, at the low end of its adjusted EBITDA range, and toward the upper end of its implied adjusted EBITDA margin range, management said.
Drayton adds advanced deposit wagering reach in more than 30 U.S. states, compared with traditional iGaming availability in seven states, Mazij said. The acquisition also includes equity interests in five game development studios and three wholly owned technology and distribution platforms, as well as more than 100 proprietary game titles, according to management.
Bragg said its primary near-term focus is integrating Drayton’s assets, particularly in North America, where it sees opportunities to combine content, technology and distribution capabilities. Management also expects the acquisition to support its AI-focused operating model and potentially improve content-creation costs.
Commercial and board updates
During the quarter, Bragg signed an agreement with Dutch and Belgian operator 711 to power its new Belgian online sportsbook through Kambi Sportsbook and Bragg’s Fuze engagement toolset. The company also supported Super Technologies’ Superbet brand in entering Greece’s regulated market with remote game server and hub aggregation services.
Bragg launched content with Bet365 in the U.K. and made more than 80 titles available in Alberta when the province opened its regulated market. Management said Alberta had been part of its plans, though the company had not assigned significant growth expectations to the newly opened market.
The company also announced that director Don Robertson resigned from the board. Jordan Gnat, co-founder and managing partner of Boardwalk Capital and former founder and leader of Playmaker Capital, will join the board in his place.
About Bragg Gaming Group (NASDAQ:BRAG)
Bragg Gaming Group is a business-to-business supplier of online gaming content, technology and platform solutions. The company develops and distributes a mix of proprietary, third-party and licensed casino games, including video slots, table games and live dealer experiences. Its core offering centers on a scalable gaming platform designed to support operator integration, player management and advanced analytics.
Bragg’s technology stack features its flagship ORYX Gaming platform, which provides a centralized hub for game aggregation, platform services and regulatory compliance tools.
