Bragg Gaming Group reports Q3 revenue decline amid cost-cutting measures

Bragg Gaming Group has reported third-quarter revenue of EUR 20.6 million for 2026, representing a 23% decline compared with the same period last year. The financial results highlight ongoing changes to the company's business structure as it works to reduce operating costs, expand proprietary gaming content and integrate its recently acquired Drayton International business.

Despite the lower revenue, Bragg recorded improvements in its gross profit margin and continued to implement restructuring measures intended to strengthen its financial position. The company also reported growth in proprietary content distributed across Canada and the United States, indicating progress in its strategy to increase the contribution of internally developed gaming products.

The third-quarter results were also accompanied by developments in Brazil, where regulatory restrictions affected the company's supply arrangements. In addition, Bragg announced a leadership transition following the appointment of Morten Tonnesen as interim chief executive officer on November 6, 2026.

Bragg reports lower third-quarter revenue

Bragg generated EUR 20.6 million (US$ 23.4 million) in revenue during the third quarter of 2026. This compares with EUR 26.8 million (US$ 31.5 million) recorded in the corresponding period of 2025.

The 23% year-over-year decline reflects several developments affecting the company's operations. These include customer migrations away from its legacy Dutch platform and changes in Brazil, where certain third-party content providers have moved towards direct integrations with operators.

On a normalised basis, Bragg reported revenue of EUR 20.0 million, representing a 12% decrease compared with EUR 22.7 million in the third quarter of 2025. However, the figure increased by 4% from EUR 19.3 million in the second quarter of 2026.

This sequential improvement provides a more positive indication of the company's performance when compared with the previous quarter. It also comes as Bragg continues to adjust its revenue mix and concentrate more resources on proprietary content and technology.

One of the stronger areas of performance was proprietary gaming content distributed in North America. Revenue from these products across Canada and the United States increased by 7% year over year during the third quarter. Growth reached 21% for the nine-month period ending September 30, 2026.

The figures highlight the importance of Bragg's in-house content strategy as it seeks to reduce its dependence on third-party aggregated gaming products.

Gross margin improves despite lower revenue

Although Bragg experienced a significant reduction in quarterly revenue, its gross margin improved during the reporting period.

The company recorded a gross margin of 56%, representing an increase of 155 basis points compared with the third quarter of 2025. It also reported an improvement of 450 basis points compared with the 52% margin recorded in the second quarter of 2026.

The improvement was attributed primarily to a higher contribution from proprietary gaming content and lower volumes of aggregated third-party content.

This development is relevant to Bragg's broader financial strategy. Proprietary products can provide greater control over game development, distribution and commercial arrangements. A stronger contribution from these products can therefore improve the company's overall revenue mix.

However, the stronger margin did not fully offset the reduction in revenue. Bragg's operating performance remained under pressure as the decline in gross profit exceeded the savings achieved through its restructuring programmes.

Operating loss reached EUR 3.2 million (US$ 3.6 million) in the third quarter of 2026, compared with EUR 1.2 million (US$ 1.4 million) in the same period last year.

Adjusted EBITDA amounted to EUR 3.0 million (US$ 3.4 million), down 33% from EUR 4.4 million (US$ 5.2 million) a year earlier. The Adjusted EBITDA margin also declined to 15% from 17%.

Bragg explained that the EUR 3.1 million reduction in gross profit was greater than the approximately EUR 1.6 million in operating cost savings achieved during the quarter. The company added that the benefits of its July 2026 restructuring programme were still being phased in.

Drayton International acquisition expands Bragg's capabilities

Another important development during the third quarter was Bragg's completed acquisition of Drayton International.

The transaction closed on July 22, 2026, with Bragg acquiring the diversified gaming technology and content platform for US$ 9 million. The consideration was satisfied entirely through the issuance of Bragg shares rather than a cash payment.

Drayton combines gaming content development with technology and distribution capabilities. Its addition is intended to broaden Bragg's portfolio and strengthen its position in gaming content creation and delivery.

Following completion, Bragg consolidated Drayton's financial performance into its own results from the acquisition date.

For the period between the completion of the transaction and the end of September, Drayton contributed EUR 0.7 million in revenue and EUR 0.3 million in profit before income taxes.

The acquisition represents an important component of Bragg's strategy to expand its proprietary content offering and improve its technology capabilities. However, the company will need to demonstrate how effectively it can integrate the acquired operations and translate the additional capabilities into sustainable financial contributions.

Management has identified the optimisation of the combined business as an important priority.

Restructuring measures reduce operating costs

Bragg also continued implementing cost-reduction initiatives during the third quarter as it works towards a more streamlined operating structure.

The company reported that salaries and subcontractor expenses declined by 30% on an underlying year-over-year basis, excluding exceptional items.

The restructuring programmes announced on January 8 and July 9, 2026 have collectively reduced Bragg's global workforce by approximately 27% since the beginning of the year.

These measures form part of a wider effort to align operating expenses with the company's changing revenue base. Management is seeking to improve cost efficiency while concentrating investment on areas considered strategically important, particularly proprietary gaming content and technology development.

However, the restructuring has also generated exceptional expenses. Bragg recorded EUR 1.1 million (US$ 1.2 million) in restructuring-related termination costs during the third quarter.

The company expects the benefits of the cost-reduction measures to become increasingly visible as implementation progresses. Nevertheless, the latest results demonstrate that the savings achieved so far have not completely offset the financial impact of lower revenue.

Brazil regulatory developments affect operations

Bragg also addressed the impact of regulatory developments in Brazil, where a provisional measure introduced in September 2026 significantly affected the online betting market.

On September 25, Brazilian President Luiz Inácio Lula da Silva signed Provisional Measure 1,394/2026. The measure prohibited the operation, offering, intermediation and advertising of fixed-odds betting lotteries throughout the country, covering sports betting and online games.

The transition arrangements required the relevant websites and applications to become unavailable from October 6, 2026.

Bragg said it ceased supplying its affected licensed Brazilian customers in accordance with the timetable established by the measure.

The company indicated that the financial implications were expected to remain limited. Brazilian revenue was predominantly generated through lower-margin aggregated content, meaning its contribution to gross profit and cash flow was considerably smaller than its share of total revenue.

Bragg also reported that its gross profit margin improved during the first month following the cessation of supply to the affected customers. Management said this helped limit the impact on profitability.

The regulatory situation remains subject to legislative developments. On November 11, 2026, Brazil's Congress extended the deliberation period for Provisional Measure 1,394/2026 by 60 days, with the new deadline set for March 4, 2027.

The development introduces additional regulatory uncertainty for companies with exposure to the Brazilian betting market.

Bragg announces leadership transition

Bragg also confirmed a change in its executive leadership following the reporting period.

On November 6, 2026, Morten Tonnesen was appointed interim chief executive officer. Matevž Mazij, who previously held the position, transitioned to the role of strategic advisor.

Tonnesen joined Bragg in March 2026 and had been serving as chief operating officer before his appointment.

His new responsibilities include overseeing the company's day-to-day operations while supporting the execution of its financial and operational priorities.

The leadership transition comes at a significant stage for Bragg. The company is integrating an acquired business, implementing workforce reductions and reassessing its investment priorities while navigating changes in several operating markets.

Tonnesen's immediate focus is expected to centre on operating discipline, improved cash generation and strengthening the contribution of proprietary products.

Commenting on the third-quarter performance, Morten Tonnesen, interim chief executive officer of Bragg, said:

“The year-over-year revenue decline is concentrated in two things we have been signalling for some time, the customer migrations off our Dutch platform and the move by third-party providers in Brazil to direct integrations with operators. Where we are investing, the direction is the right one. Revenue from our proprietary content deployed in Canada and the United States grew 7 per cent in the quarter and 21 per cent over the nine months. That shift towards our own content, alongside lower aggregated content volumes, is reflected in a gross margin of 56 per cent.

“Our cost reductions have not yet caught up with the revenue we have lost and closing that gap is the immediate priority. My focus is disciplined execution: bringing investment spend and operating cash generation into better balance, concentrating capacity on proprietary content and delivering for our operator partners.”

Management focuses on cash generation and integration

Bragg's outlook reflects the need to balance operational efficiency with continued investment in its technology and content portfolio.

Management said it was not aware of any significant changes in operating conditions during the third quarter beyond the developments described in the company's financial announcement, including the regulatory situation in Brazil.

The integration of Drayton International is expected to remain a central part of the company's operational priorities. Bragg aims to combine the acquired assets with its existing capabilities to strengthen content development, technology infrastructure and distribution services.

The leadership transition is also expected to support a more focused approach to business execution.

For the near term, management has identified improved balance sheet strength, stronger operating cash flow and more disciplined investment allocation as key priorities.

The company is also seeking to concentrate resources on the development and deployment of its technology, proprietary content and services. These efforts are intended to support sustainable growth and shareholder value.

Conclusion

Bragg Gaming Group's third-quarter 2026 results illustrate the challenges involved in restructuring a business while adapting to changing market conditions. The 23% revenue decline and lower Adjusted EBITDA demonstrate that the company's cost base has not yet fully adjusted to the reduction in revenue. At the same time, the improvement in gross margin and continued growth in proprietary content across Canada and the United States offer encouraging indications of progress in its strategic repositioning.

The acquisition of Drayton International provides another opportunity to strengthen the company's content development and distribution capabilities. However, the longer-term value of the transaction will depend on successful integration and the ability to translate its technology and content portfolio into stronger commercial performance.

Bragg's next stage will therefore be measured by more than revenue growth alone. Its ability to improve cash generation, control operating expenditure and increase the contribution of proprietary gaming products will be equally important. The leadership transition under Morten Tonnesen adds another dimension to this process, placing greater emphasis on execution and financial discipline.

Ultimately, the company's direction is becoming clearer, with a stronger focus on proprietary content, operational efficiency and a more integrated business structure. Whether these priorities can reverse the current financial pressures remains to be demonstrated in subsequent reporting periods. The coming quarters will provide a more meaningful indication of how effectively Bragg can turn its restructuring efforts and recent acquisition into sustainable financial progress.

FAQs

How much revenue did Bragg Gaming Group generate in Q3 2026?
Bragg reported EUR 20.6 million in total revenue for the third quarter of 2026, representing a 23% decrease compared with EUR 26.8 million in the same quarter of 2025.

Why did Bragg's revenue decline in the third quarter?
The decline was primarily associated with customer migrations away from the company's Dutch platform and changes in Brazil, where third-party providers moved towards direct integrations with operators.

What was Bragg's normalised revenue in Q3 2026?
The company reported normalised revenue of EUR 20.0 million. This represented a 12% year-over-year decline but a 4% improvement compared with the second quarter of 2026.

Did Bragg improve its gross profit margin?
Yes. Bragg reported a gross margin of 56% in the third quarter, supported by a higher contribution from proprietary gaming content and lower aggregated content volumes.

What was Bragg's Adjusted EBITDA in Q3 2026?
Adjusted EBITDA reached EUR 3.0 million, compared with EUR 4.4 million in the third quarter of 2025. The company reported an Adjusted EBITDA margin of 15%.

What is the Drayton International acquisition?
Drayton International is a diversified gaming technology and content platform acquired by Bragg on July 22, 2026, for US$ 9 million in an entirely share-based transaction.

How much did Drayton contribute to Bragg's third-quarter results?
Between the acquisition date and September 30, 2026, Drayton contributed EUR 0.7 million in revenue and EUR 0.3 million in profit before income taxes.

What cost reductions has Bragg implemented in 2026?
Bragg introduced restructuring programmes in January and July 2026. Together, these initiatives reduced its global workforce by approximately 27% since the beginning of the year.

How did Brazil's regulatory measures affect Bragg?
The introduction of Provisional Measure 1,394/2026 led Bragg to cease supplying affected licensed Brazilian customers. The company said the financial impact was limited because Brazilian operations mainly involved lower-margin aggregated content.

Who is the interim CEO of Bragg Gaming Group?
Morten Tonnesen became interim chief executive officer on November 6, 2026. He previously served as chief operating officer, while former CEO Matevž Mazij transitioned to a strategic advisor position.