Hello, everyone. Thank you for joining us and welcome to Brag Gaming Group's second quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Robbie Bressler, CFO. Please go ahead.

Good morning everyone and thank you for joining us for Bragg Gaming Group's second quarter 2026 earnings call. If you are connected to our online webcast today, you should see our second quarter earnings presentation on your screen and you should have control to flip through the slides yourself as you listen to the call. If you are joining by telephone, please note that you can find Our earnings presentation as well as the financial results press release on our website at investors.brag.group Please note that certain statements on this call may constitute forward-looking information or future-oriented financial information. A full explanation of these risk factors is available on the second slide of the second quarter 2026 earnings presentation titled forward-looking statements. as well as in the press release issued this morning and our public disclosures. BRAC disclaims any obligation except as required by law to update or revise any forward-looking statements whether because of new information, future events or otherwise. Any forward-looking statements made on this call speak only as of the date of this call. Bragg Gaming Group CEO Matevz Mazij and myself, the CFO of Bragg Gaming Group, Robbie Bressler, will discuss the company's second quarter performance and provide a business update. We will follow that with a question and answer session. I would now like to turn the call over to Matt.

Thank you and good morning, everyone. Thank you for joining us for Bragg Gaming Group's second quarter 2026 earnings call. In the second quarter, we prioritized margin and cash flow performance over aggressive revenue expansion, which underpins our renewed group-wide strategy. Revenue was €22.9 million, down 12% year-over-year. Adjusted EBITDA was held static at €3.5 million, and our adjusted EBITDA margin expanded to 15% from 13% in the same quarter last year. On July 9, 2026, we announced a further reduction of approximately 19% of our global workforce, expected to deliver approximately €6 million in incremental annualized cash savings and bringing total expected annualized savings to approximately €10.5 million, together with the restructuring announced on January 8, 2026. Combined with the acceleration of our AI-first transformation, it leaves a leaner organization concentrated on our core technology, content, and platform products, and it accelerates our path to cash profitability and adjusted EBITDA growth. Furthermore, I would like to highlight our content performance across North America, especially in Canada and the United States. Our proprietary content being deployed by US and Canadian operators is building very positive traction. This content revenue grew 44% compared to Q2 last year, driven by distribution, quantity and quality of content. Proprietary content is our most profitable product and the US is the most important market for us. So seeing this level of growth is exciting, and it underlines the growth strength of the content we build. Against that, the Netherlands declined 14% year over year, reflecting the anticipated roll-off of legacy turnkey contracts following customer migration away from our PAM. Brazil was static as certain operators moved to direct supply integrations, which moderated growth but improved the quality of the revenue we retained. Some other European markets were lower due to the customer specific factors and tightening local regulatory dynamics. Since quarter end, we have also closed the acquisition of Drayton International and Matt Davey has joined us as non-executive chairman. I will come back to both of those after Robbie takes you through the financials. Robbie, over to you.

Thank you, Mats, and good morning, everyone. All of the numbers I refer to have been rounded, so they are approximate. Our reporting currency is Euro, and I will stay in Euros on this call. For the benefit of North American investors, we've provided a US dollar equivalent conversion in our press release this morning. Second quarter revenue was €22.9 million, a decrease of 12% from €26.1 million in the second quarter of 2025. Gross profit was €11.8 million against €13.7 million in Q2 2025, with a gross margin of 51.7% compared to 52.7%. Adjusted EBITDA margin was €10. 3.5 million euro static against 3.5 million euro in the second quarter of 2025 with the adjusted EBITDA margin expanding 212 basis points to 15.4% from 13.3% in the second quarter of 2025. We absorbed a 3.2 million euro reduction in revenue and delivered the same absolute adjusted EBITDA As Mats mentioned, we have completed several restructuring programs and are starting to see the results of these measures. In the second quarter, there was a 14% reduction in gross compensation costs prior to capitalization compared to Q2 2025. Sequentially, revenue came down from €25.7 million in the first quarter of this year to €22.9 million in the second quarter. Adjusted EBITDA Margin Holding margin through a sequential revenue decline is proving the cost reduction measures are doing their work. For the six months ended June 30th, 2026, revenue was 48.5 million euro, down 6% from 51.6 million euro in the first half of 2025. Adjusted EBITDA for the half year was 7.5 million euro, flat against 7.5 million euro in the same period last year. Moving to the balance sheet, as of June 30th, 2026, Bragg had cash of 3.3 million euros. Three items since quarter end are relevant to our capital structure. First, we completed the acquisition of Drayton International on July 22nd for 9 million US dollars, satisfied entirely in shares. Second, all 751,445 subscription receipts issued at 1.73 US dollars converted into common shares and warrants on closing, releasing approximately 1.1 million euros to the company. I would like to note that our chief operating officer, two of our directors, Thomas Winter and Matt Davey, and myself subscribed in that private placement. Third, we renewed our revolving credit facility with Bank of Montreal for a further year on terms consistent with the existing arrangement. Turning to our outlook, as mentioned, we completed the acquisition of Drayton on July 22nd, 2026, and integration planning is underway. We previously disclosed fiscal 2026 revenue adjusted EBITDA and adjusted EBITDA margin guidance. which was prepared in respect of our company's operations on a standalone basis. With the integration of Drayton into our operations being at the planning stage, we don't have a reasonable basis on which to forecast the combined business for the remainder of the fiscal year. We are therefore withdrawing our previously disclosed 2026 guidance. Prior to the withdrawal and on a standalone basis excluding Drayton, We were tracking below the low end of our revenue guidance range and at the low end of our adjusted EBITDA range. However, we were tracking to the upper end of the implied adjusted EBITDA margin range provided. Our focus is on integrating and optimizing the combined business, including aligning the product and technology roadmap, realizing identified efficiencies, and establishing the go-forward operation model and cost base. And with that, I will pass it back to Mats.

Thank you, Robby. A few commercial highlights from the quarter. We signed a definitive agreement with 7-Eleven, a leading Dutch and Belgian operator, to power its new Belgian online sportsbook, integrating Cambie's sportsbook supported with our Fuse engagement toolset. We supported Super Technology's entry into the regulated Greek market through its SuperBet brand, with RGS and Hub aggregation. The successful launch of our content with Bet365 in the UK signals our effective penetration into key markets. Additionally, when Alberta opened its regulated market, we launched on day one alongside an outstanding selection of leading operators, making more than 80 of our titles available to players throughout the province. Our strategic direction is unchanged. Proprietary games first, AI-driven model, fewer low-margin aggregation volumes, and a move from being a supplier of components to being the architect of the ecosystem our operators run on. Trayton advances that, and the point that matters most is reach. It takes us into advanced deposit wagering. Traditional iGaming is live in seven US states. ADW is available in over 30. It also adds equity interest in five game development studios and three wholly owned technology and distribution platforms. On timing, integration work is underway across content and technology, and it remains at an early stage. Before we go to questions, I would like to announce a change to our board. Don Robertson has resigned from the board effective today. I want to thank Don for his service and for his contribution to Bragg. Jordan Gnat will be joining the board in his place. Jordan brings over 30 years of expertise, serving as both an investor and an operator, over 20 of those in gaming and sports media. He's a co-founder and managing partner of Boardwalk Capital. Before that, He founded and led Playmaker Capital, the digital sports media business he sold to Better Collective in 2024. He has also held senior roles at Fox Bet, The Stars Group, and Scientific Games. Jordan also participated in our recent private placement, so he's a shareholder as well as a director. His background strengthens the board and we're glad to have him. Robbie and I are now available to take any questions.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jordan Bender with Citizens. Your line is open, Jordan. Please go ahead.

Hey, everyone. Good morning, and thank you for the question. Robbie, maybe to start with you, just on the guidance that was withdrawn, you mentioned revenue and EBITDA may be trending below where it previously was. Can you just kind of talk about the old business, if we want to call it that, kind of where are you seeing some of that pressure? I guess we know Netherlands, there was previously going to be headwinds. I assume that was in the guidance, but just and so forth. Where are you seeing kind of some of the maybe the weakness outside of that? And then maybe the second part of it in acknowledging you're not providing guidance looking forward, but now that Drayton is part of the business, can you maybe just talk about more like directionally how the growth, either revenue or EBITDA of that business currently stands as we kind of think about the two businesses now together? Thank you.

Sure. We were trending below the low end of the range for revenue, but we are trending within the range for EBITDA, but just at the low end of the range. So what we're seeing is more pressure on revenue, and with our cost-cutting measures, we've been able to keep our EBITDA margin within what we had thought the business would be performing at. In terms of what is driving the top line pressure, we are seeing one thing to note in Brazil. When the market opened in Brazil, there was a lot of suppliers who were not set up to supply the market. and we were able to be utilized as a vehicle for them to supply their content into the market. This has softened a lot of these suppliers are now set up in a manner where they can go direct to operators rather than going through us. This is relatively low margin revenue, so it's not really having too much of a profound impact on our bottom line, but these headwinds We've also seen some regulatory changes in different European jurisdictions, one being Croatia, which we have a good customer there and we were foreseeing a good strong year. It has performed year over year. We're seeing good growth, but these regulatory changes that came in have proven to be much more Impactful than previously thought. And these regulatory changes had to do with the way customers are acquired and advertising restrictions. So those are two fairly sizable headwinds that are hitting us. We've also seen a little bit of decrease in what's put out in our Wild Street studio. So historically, we've had a relationship where we've developed on behalf of other providers or other studios who've done the distribution. And that has softened slightly. So I point to those three things as being what has changed between us hitting within the guidance range and being slightly below that.

Okay, and then any color on just kind of directionally how Drayton is growing?

Yeah, so we're really in early days to be putting any real color behind what we expect Drayton to do in the next six months and beyond. Integration work is happening now. We completed the acquisition in good pace, and we're really now focused on making sure that we can utilize I'm not going to provide specific details where we think we'll be. A big reason why we made the decision to withdraw guidance because we're not quite there in terms of being comfortable with what that forecast could look like. One aspect of Drayton, which I think is a huge positive, but it is going to take us some time to get clear on direction in which way we'll go in the near term. is we have equity investments in five studios. So each studio is in itself its own business with its own trajectory and its own outlook. So we wanna be very comfortable with each of those management teams, understand what is gonna be at play in the next six months, but also make sure that we can utilize the assets we have at Bragg to enhance those results not going to put out anything yet. Great.

If I may just add, Jordan, so Drayton obviously is an acquisition that's going to accelerate our growth through market access and margin expansion and tech efficiency. And through its ADW technology and partnerships, it's going to increase our addressable reach Second, we added 100-plus proprietary game titles and five studios, and that is in line with our strategies directly shifting our revenue mix towards higher margin in-house IP. And finally, obviously, tech assets like their AI module fit seamlessly into our AI-first framework or model. and it's reducing our unit cost of content creation and some other effects that that will have on our cost base.

Great, thank you. And let me just follow up this whole conversation. So just kind of in the quote of the press release, it says we'll require a real change. Sorry, Jordan, I can't hear you. So you can talk to that.

I don't know if it's your mic. I can't.

Jordan is breaking up.

Yeah. Why don't we go to the next and Jordan can join the queue.

Your next question comes from the line of Jack Vanderard with Maxim Group. Your line is open, Jack. Please go ahead.

Okay, great. Good morning, guys. Congrats on the closing of the acquisition. In addition to taking my questions, Robbie, Just to follow up on some of the past comments and questions on the withdrawn revenue guidance, the prior revenue guidance, this excluded Drayton, but are there any new markets, maybe if I can, are there any new markets you entered or new catalysts that happened subsequent to providing that guidance that didn't maybe factor in? For example, you entered the Alberta market in mid-July. and any other developments maybe that weren't included or maybe they were factored in. Are these incremental to that prior withdrawn guidance or is that something you don't want to comment on?

Thanks. I'll comment on Alberta was always in our plans. That was a launch and a strategic, important milestone for us to hit. We haven't, you Gaming and iCasino especially, is doing in North America across many jurisdictions. So we did point out in our press release that our underlying U.S. business, so this is the proprietary content we service both U.S. and Ontario and now Alberta, that's growing at a very good tick. We're well over 40% growth. from quarter to quarter, Q2 to Q2, 2026 to 2025. So we're seeing growth in the areas we want to see and in the areas we've invested in. But we're not necessarily jumping to new markets. We want to be very strategic in any territorial expansion. So I wouldn't point to anything new that has come up. Thank you for joining us. and with the Drayton acquisition, we've really strengthened ourselves to be able to capitalize on that and quite excited about what can be achieved in that market.

Okay, I appreciate the color there. And then maybe just a follow up on, I guess the go forward gross margin and operating expenses on a quarterly basis and just how I interpret some of the language here. So obviously you're going to have incremental expenses, most likely from Drayton. But then you also made further, I think there was a July announcement where you made further restructuring, material restructuring that was going to cost cash savings of $6 million or so. I'm sorry, $10.5 million now altogether. So I guess you've done a good job obviously in the first half of this year. OpEx is down pretty big from last year. Gross margin did tick down a little bit in the second quarter. I guess with all these puts and takes now, how does the back half of this year compare to the back half of last year on a gross margin and OPEX basis?

I appreciate the question. I'm going to reserve comment just because we have withdrawn guidance and we want to come back with a clear understanding of what our combined business can do. I can't say directionally. I think the trends that we've seen are indicative of our current run rate of the legacy business. The gross margin for Q2 2026, you'll see in our investor deck, there was a couple of one-off items that brought it down slightly. But if you factor those out, we're actually at about a 55%, 55.7% gross margin percentage, which is very much in line with where we've been and slightly better than prior. The more we move to proprietary content, the more we see our margins get better. That is playing out. We had a couple of one-off items that brought that down a bit. If you look at our investor deck, it's illustrated to see what that gross margin percentage is, which is really indicative of our current business in terms of run rate.

Okay, great. I appreciate all the color there, Robbie. I think that's it for me for now. I'll be back in the queue. Yep. Thank you.

Your next question comes from the line of Mike Hickey with Stonex. Your line is open, Mike. Please go ahead.

Awesome. Thank you. Hey, guys. Good morning. Just maybe a clarification. I'm not sure if I heard this or not. A little perplexed on at least not giving guidance on the core, Robbie, just given that you just missed the quarter on revenue. And I'm not sure you clarified how you think revenue is going to trend on your core, but I think you would have visibility on that. So anything incremental would be helpful. And then when should we get... Maybe talk about the complexities of brag and drain together that doesn't allow you the ability to give guidance on the new combined company.

Sure. Thanks for the question, Mike. On your first question, just to clarify, so we did provide comments of where we're trending on the standalone business, and those comments are looking for and many more. and many more. and many more. Thank you for joining us. excited and believe that there is quite good possibilities to see synergies a little bit on the cost side, but on the revenue side in putting these assets together. So we want to make sure we have a clear, reasonable understanding to put out expectations on.

On your annualized cost savings, the 10.5% How much should we actually see here in 26 versus 27? What do you think needs to happen for Bragg to start to generate sustainable positive cash flow, free cash flow?

Yeah, I mean, we've done the work and we've taken out the cost. We're by no means done in terms of optimizing and seeing where more costs can come out. The savings... We did this quarter, just to give some color, if you look at our gross compensation, so take out the one-time severance fees that we paid this quarter and pay Disregard what's capitalized and what's not in terms of compensation. So if you look at our pure compensation number from Q2 this year to Q2 last year, our compensation expenses are down 14%. So we are seeing the savings and there's lots more to go. We got to get through these one-time severance payments, which we're going to have coming through the next couple months. and then into Q4 and into 2027, the savings should really be showing through our numbers.

The last question from us, just thinking about milestones here in the next, call it two or three quarters, what do you think sort of the biggest milestones that we should be looking at to sort of demonstrate that the restructuring and trait and acquisition are starting to give you the benefits that you think they will or basically that they're working

Very good question. Our focus 100% is on the integration of the Drayton assets, most importantly in the US, or I should say North American markets. That's where we're focused. That's where we see the value in Drayton coming together with our assets. And that's where we believe from a value point of view is most important for us to keep. We saw some good percentage growth, 44% Q2 to Q2 and even year to date and sequentially quarter to quarter we're seeing double digit growth. So that's our focus. Those are the milestones. That's the market that we want to keep conquering. And I really think we've taken the right steps here with bringing Drayton in. We have reached the end of the Q&A session. I will now turn the call back to Matevz Mazij, CEO, for closing remarks. Thank you again everyone for joining our call today.

We entered the second half of 2026 leaner, sharper, and with a clear games-first focus. Thank you for your interest and your continued support.

This concludes today's call. Thank you for attending. You may now disconnect.