Good cost discipline and guidance intact - Q3 review

GiG reported a solid Q3, with sales slightly above our expectations and adj. EBITDA slightly below. The deviations were minor and we argue that the company’s continued cost discipline supports the profitability and cash flow case. We fine-tune our estimates and maintain our fair value range of SEK2.5–6.2 per share.

A solid quarter. GiG delivered a solid quarter, with revenue of EUR8.5m (-12% Y/Y) slightly above our estimate, but EUR0.8m adj. EBITDA slightly below our expected EUR1.1m. The deviations are minor and our focus is on profitability and cash flow improvement, which is why we think the company’s focus on cost discipline is positive. GiG broadly reiterated its 2026 guidance (increasing the bottom end marginally) at revenue of EUR45m–48m and adj. EBITDA of EUR5.5m–-7m, and it now expects 2027 revenue of EUR85m–90m and adj. EBITDA of EUR17m–19m, roughly in line with our expectations ahead of the report.

Estimates fine-tuned following 2027 guidance. We increase our 2026–28e revenue by 0–1% and adj. EBITDA by 1–2%, now expecting GiG’s adj. EBITDA to grow from EUR5.7m in 2026 to EUR18.5m in 2028, driven mainly by the acquisition of 888Africa and its consolidation from Q4 2026. Our adj. EBITDA estimate is slightly below the company’s bottom-end of its 2027 guidance, leaving some estimate upside potential should it execute according to its plan.

Fair value range of SEK2.5–6.2. GiG is making progress in its strict cost discipline and focus on profitability, which we believe is positive for the equity story at this point, especially when one key concern has been the cash flow generation. We do not pencil in much growth in GiG’s core business ahead, as we would want more evidence of organic growth before including it in estimates. We expect a stable performance for GiG’s core business, with 888Africa driving the significant sales and earnings growth in our estimates for 2027. We maintain our fair value range of SEK2.5–6.2, which is based on a peer group valuation and ‘Rule of 40’ regressions.