What happened
Shares of online-gambling industry services provider Gan Ltd (GAN) fell as much as 19.6% in trading on Tuesday after reporting second-quarter 2021 financial results. Shares didn't bounce much off their lows early in the day and are still down 17.3% as of 1:30 p.m. EDT.
So what
Revenue jumped 316% to $34.6 million on the back of the Coolbet acquisition, which has been a great addition for this growth stock. Sequentially, revenue rose 24.4% and topped the $34.5 million that analysts were expecting.
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Investors were more disappointed on the bottom line, where net loss was $2.7 million, or $0.07 per share. That's compared to an expected loss of just $0.01 per share.
For the full year, management expects revenue of $125 million to $135 million, growth of 270% versus 2020 and the midpoint. That's tremendous growth for any company, even if less than expected is flowing to the bottom line.
Now what
Gan actually saw a sequential decline in revenue from business-to-business (B2B) customers from $13.5 million in the first quarter to just $10.6 million last quarter. That was more than offset by the business-to-consumer (B2C) market growing to $24 million from $14.3 million a quarter ago, but the B2B decline is concerning, nonetheless.
Taking a step back, there were ups and downs, but overall, this online-gambling company is still growing like crazy. And as it launches new products and expands markets, we should see growth continue.
I think that the company will overcome a slight earnings miss short term. For investors looking at a decade of growth coming to online gambling, this is a great buy and hold stock, even if it will be volatile in the meantime.
