G2MNO.OL - Balance Sheet.csv
Description
Business: Affiliate business predominately within iGaming but also sports betting, connecting online operators with players through a portfolio of 100+ websites, apps and social media Websites include AskGamblers, CasinoTopsOnline, Time2play etc. – serve as content hubs and comparison of offers from casino operators Revenue Breakdown: Revenue Sharing Agreements (58% of last Q revenue): Operators pay Gentoo a percentage (usually 40-50%) of Net Gaming Revenue (NGR) generated by First Time Depositors (FTDs) referred by Gentoo. The percentage is paid over the full lifetime of the customer, i.e. several years. This is a recurring income stream that aligns Gentoo’s success with the operators’ long-term revenue from the player CPA (Cost Per Acquisition) (9%): Operators pay a one-time, fixed fee for each FTD referred by Gentoo. This model is immediate but lacks recurring income Listing Fees/Other (33%): Payments from operators for premium placement on Gentoo’s websites, including sponsored content, banners, and exclusive promotional deals Key Metrics: First Time Depositors (FTD): Over 500,000 annually Top 5 Websites: Contribute ~25-30% of total revenue Geographic Revenue Distribution: 59% from Europe, 21% from the Americas, with the remainder from other global markets Traffic Generation: Gentoo acquires players via SEO-optimized content and AdWords Leverage of 2x EBITDA; 90m bonds outstanding and 28m deferred consideration for past M&A (opportunity to reduce high interest rate over coming years) Thesis: Company under-the-radar after having spun off from the Platform & Sportsbook division within Gaming Innovation Group (GiG) late last year. Stock trades on 6.6x 2025 P/E or FCF and 5x 2026, while growing low teens, in line with the sector. EBITDA margins at 50%. Capital light business generating cash flow while growing Comps like Gambling.com trade in mid teens. Better Collective trades at 11x (after derating from 20x+ recently) A key strength of Gentoo’s business lies in its revenue mix. Approximately 60% of its revenue comes from recurring revenue share agreements, which are tied to the ongoing performance of operators. This model provides a stable, predictable income stream and reduces the company's reliance on one-time CPA revenues. As player spending increases over time, Gentoo’s revenue share naturally grows, even without adding new contracts. Current valuation does not accurately reflect the visibility of recurring revenue stream Strong media assets, in-house expertise in SEO and content creation Company has been successful in acquiring underperforming media assets and turning them around by using inhouse technology, better SEO generating more traffic and better content