Overview of the Company’s Financial Performance

High Roller Technologies, Inc. is an evolving and growth-oriented iCasino and entertainment company that focuses primarily on online casino betting in Europe, North America, and South America. The company operates an online gaming business offering casino games to customers in various jurisdictions worldwide under the HighRoller.com and fruta.com domain names.

For the year ended December 31, 2024, the company reported revenue of $27.9 million, down 6% from $29.7 million in the prior year. This decrease was primarily due to the company’s exit from the Hungarian market in the second half of 2023 due to changes in the regulatory environment, as well as declines in New Zealand and Norway, partially offset by growth in Finland.

The company’s net loss widened to $5.9 million in 2024 from $2.8 million in 2023. This was driven by a 6% decline in revenue combined with a 4% increase in total operating expenses to $33.7 million. The higher expenses were mainly due to increases in advertising and promotion costs, as well as product and software development expenses.

As of December 31, 2024, High Roller Technologies had $6.9 million in cash and cash equivalents, up from $2.1 million at the end of 2023. However, the company had negative working capital of $1.4 million and an accumulated deficit of $27.1 million. Cash used in operations was $3.9 million in 2024 compared to cash provided by operations of $762,000 in 2023.

Revenue and Profit Trends

High Roller Technologies generates revenue primarily through hold, or gross winnings, as users play against the house on its online casino platform. The company’s revenue decreased by 6% in 2024 to $27.9 million, driven by its exit from the Hungarian market and declines in New Zealand and Norway, partially offset by growth in Finland.

The company’s net gaming revenue margin, calculated as net revenue divided by total wagers, was 4.4% in 2024 compared to 4.2% in 2023. This slight improvement was due to a lower return to players, despite a 9% decrease in total wagers from $697.8 million in 2023 to $638.4 million in 2024.

High Roller Technologies’ net loss widened from $2.8 million in 2023 to $5.9 million in 2024. This was primarily due to the 6% decline in revenue combined with a 4% increase in total operating expenses. The higher expenses were driven by increases in advertising and promotion costs, as well as product and software development expenses.

Strengths and Weaknesses

Strengths:

• Diversified geographic footprint, with a presence in several regulated markets in Europe, North America, and South America
• Scalable platform that allows the company to launch new brands efficiently using existing resources
• Relationship with Spike Up Media, a leading provider of high-quality, cost-effective lead generation
• Robust selection of over 4,400 slot and other iCasino games from over 70 content providers
• Focus on providing a superior customer experience through features like fast onboarding, secure payment processing, and generous bonuses

Weaknesses:

• Reliance on third-party licenses and agreements to operate in certain markets, which could be terminated or not renewed
• Negative working capital and accumulated deficit position, indicating potential liquidity challenges
• Significant increase in operating expenses, particularly in advertising and promotion, outpacing revenue growth
• Exposure to regulatory changes in key markets, as evidenced by the exit from Hungary
• Dependence on a small number of high-value markets, with Finland, New Zealand, and Norway accounting for 82% of revenue in 2024

Outlook and Future Prospects

High Roller Technologies’ future prospects will depend on its ability to continue expanding into new regulated markets, particularly in North America, while maintaining a strong presence in its existing European and South American markets.

The company plans to seek entry into one or more regulated North American markets within the next 12 months, utilizing proceeds from its recent initial public offering. However, no assurances can be given that these efforts will be successful.

The company’s multi-brand strategy, which involves launching new brands utilizing its current licenses and existing resources, could provide access to new target demographics and generate additional revenue. The scalability of the company’s platform allows it to use existing resources to launch new brands with minimal incremental costs.

High Roller Technologies will also need to address its current liquidity challenges, as evidenced by its negative working capital position and accumulated deficit. Improving cash flow from operations and securing additional financing, if necessary, will be crucial for the company to fund its growth initiatives and weather any potential regulatory or market-related headwinds.

Overall, High Roller Technologies faces both opportunities and challenges in the evolving iCasino and online gaming industry. Its ability to successfully navigate new market entries, manage costs, and maintain a strong customer value proposition will be key to its future success.