Bragg Gaming Group’s Margin Revolution and Market Expansion Signal Undervalued Growth Potential

Bragg Gaming Group’s Q1 2025 earnings report has delivered a compelling case for investors seeking exposure to a gaming supplier undergoing a strategic transformation. By prioritizing high-margin proprietary content, diversifying into high-growth regulated markets, and executing operational discipline, Bragg has positioned itself to capitalize on a $40 billion addressable market by 2028. These moves, alongside its undervalued enterprise multiple, suggest the stock is primed for a re-rating as profitability and scale accelerate.

Margin Expansion: The Core of Bragg’s Value Shift

Bragg’s Q1 results underscore a stark shift in its business model: a deliberate pivot toward higher-margin revenue streams. Proprietary content now accounts for 15.5% of total revenue, up from just 10.2% a year ago, and operates at the highest margin of its three content tiers. This segment grew 62% year-over-year, driving gross profit margins to a record 56.0%—a 612 basis point improvement over Q1 2024.

The company’s strategic reduction of exposure to lower-margin businesses—most notably its BetCity operations, which now contribute just 16% of revenue (down from 42% in 2022)—has further amplified this margin renaissance. Meanwhile, adjusted EBITDA surged 19.7% to €4.1 million, with margins climbing to 16%, reflecting operational leverage as high-margin revenue scales.

Market Diversification: A Hedge Against Regulatory Risks

While Bragg faced headwinds in the Netherlands—where regulatory pressures caused a 27% year-over-year revenue decline—its focus on high-growth regions has more than offset these challenges. In the U.S., proprietary and exclusive content revenue exploded by 150% year-over-year, with gross gaming revenue (GGR) from these products rising 338%. The U.S. now represents up to 15% of Bragg’s total revenue, a figure set to grow as the market matures toward a projected $9.5 billion in 2025 and potentially $75 billion at peak.

The company’s January 2025 launch in Brazil—a $3.7 billion opportunity by 2030—has also proven strategic. Partnering with local studio RapidPlay, Bragg has secured a foothold in this fast-growing regulated market, which could contribute 10% of 2025 revenue. This diversification not only mitigates risks tied to any single jurisdiction but also aligns Bragg with the global trend toward regulated, high-margin iGaming.

Operational Efficiency: A Foundation for Sustained Growth

Bragg’s cost discipline is evident in its 63.5% year-over-year increase in cash from operations to €4.5 million—a direct result of optimizing its business mix and reducing non-core liabilities. The company repaid $5 million of its $7 million secured note and extended the remaining $2 million to June 2025, while finalizing a new credit facility with improved terms. These moves reduce financial risk and free capital for growth initiatives, such as its Caesars Digital partnership, which launched its first game—Caesar’s Palace Signature Multihand Blackjack Surrender—in Q1.

The company’s vertically integrated platform, including its Player Account Management (PAM) and Fuze™ engagement tools, further underscores its operational edge. These solutions, now accounting for 20.5% of revenue, provide scalable infrastructure for operators, ensuring Bragg remains a one-stop shop for regulated markets.

Valuation: A Discounted Play on Margin Expansion

Bragg’s enterprise value of €110 million trades at a 5.0x EBITDA multiple, a stark contrast to the 14.2x median multiple of peer exits in the gaming sector. This gap suggests significant upside if Bragg meets its 2025 guidance of €117.5–123 million in revenue and €19–21.5 million in adjusted EBITDA. With its margin trajectory and market diversification, Bragg could easily command a valuation closer to its peers, implying a potential 180%+ upside.

Conclusion: A Compelling Case for Immediate Investment

Bragg Gaming Group is undergoing a fundamental transformation: shifting from a regionally concentrated supplier to a global leader in high-margin proprietary content and technology solutions. Its margin expansion, market diversification, and operational discipline create a virtuous cycle of profitability and scalability. With an undervalued stock price and a $40 billion TAM, Bragg presents a rare opportunity to invest in a company well-positioned to dominate the regulated iGaming boom.

Investors should act now to secure exposure to Bragg’s margin revolution and geographic expansion before the market catches up. The stock is undervalued, and the catalysts—margin growth, U.S. and Brazil dominance, and partnerships—are all in place for a multiyear re-rating.

Recommendation: Buy Bragg Gaming Group.