Segment Reporting and Geographic Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

16. Segment Reporting and Geographic Information

The Company operates its business along four operating segments, which are segregated on the basis of revenue stream: Gaming, Virtual Sports, Interactive and Leisure. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated.

In prior years, and up to and including the interim period nine months ended September 30, 2020, the Company operated its business along three operating segments: Server Based Gaming, Virtual Sports (which included Interactive) and Acquired Businesses (which consisted of the businesses acquired from the NTG Acquisition). During the period subsequent to September 30, 2020, the Company completed the process of changing its internal structure, which has been ongoing since the NTG Acquisition, and as a result changed the composition of its operating segments.

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, stock-based compensation expense and acquisition related transaction expenses, operating profit/(loss), total assets and total capital expenditures for the periods ended June 30, 2021 and June 30, 2020, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, right of use assets, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions. All acquisition and integration related transaction expenses are allocated as corporate function costs. Amounts previously disclosed for the three and six months ended June 30, 2020 have been recharacterized in line with the current operating segments and categories.

In addition, as part of the recharacterization exercise, certain items of Revenue, Cost of Sales and Selling, General and Administrative Expenses have been recharacterized to ensure consistency with similar items across the Group. The revenue recharacterizations are to ensure spares and similar items are reflected with other items of hardware (Product Sales).

The resulting impact on previously reported information for the three months ended June 30, 2020 is as follows: Service Revenue, previously reported $15.2 million, now $15.3 million; Product Sales Revenue, previously reported $0.4 million, now $0.3 million; Cost of Service, previously reported $3.1 million, now $2.5 million; Selling, General and Administrative Expenses (excluding Stock-based compensation), previously reported $10.6 million, now $11.2 million.

The resulting impact on previously reported information for the six months ended June 30, 2020 is as follows: Service Revenue, previously reported $58.4 million, now $58.1 million; Product Sales Revenue, previously reported $9.5 million, now $9.8 million; Cost of Service, previously reported $9.7 million, now $11.0 million; Cost of Product Sales, previously reported $7.3 million, now $6.5 million; Selling, General and Administrative Expenses (excluding Stock-based compensation), previously reported $39.7 million, now $39.2 million.

The recharacterization has no impact on the previously reported Net Operating Loss, Net Loss or Net Comprehensive Loss for the three and six months ended June 30, 2020.

Segment Information

Three Months Ended June 30, 2021

	Gaming			Virtual Sports			Interactive			Leisure			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	12.8		$	8.2		$	5.8		$	10.7		$	—		$	37.5
Product sales		3.4			—			—			0.6			—			4.0
Total revenue		16.2			8.2			5.8			11.3			—			41.5
Cost of sales, excluding depreciation and amortization:
Cost of service		(3.6	)		(0.5	)		(0.9	)		(3.0	)		—			(8.0	)
Cost of product sales		(2.4	)		—			—			(0.3	)		—			(2.7	)
Selling, general and administrative expenses		(6.7	)		(2.7	)		(1.3	)		(8.2	)		(6.2	)		(25.1	)
Stock-based compensation expense		(0.4	)		(0.1	)		(0.1	)		(0.1	)		(2.7	)		(3.4	)
Acquisition and integration related transaction expenses		—			—			—			—			(0.1	)		(0.1	)
Depreciation and amortization		(5.8	)		(0.7	)		(0.9	)		(4.1	)		(0.4	)		(11.9	)
Segment operating income (loss)		(2.7	)		4.2			2.6			(4.4	)		(9.4	)		(9.7	)
Net operating loss																$	(9.7	)
Total assets at June 30, 2021	$	78.6		$	61.9		$	13.8		$	90.0		$	41.9		$	286.2
Total goodwill at June 30, 2021	$	1.4		$	48.6		$	0.4		$	34.4		$	—		$	84.8
Total capital expenditures for the three months ended June 30, 2021	$	3.0		$	1.1		$	0.9		$	1.7		$	0.6		$	7.3

Three Months Ended June 30, 2020

	Gaming			Virtual Sports			Interactive			Leisure			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	4.1		$	7.6		$	3.4		$	0.2		$	—		$	15.3
Product sales		0.1			—			—			0.2			—			0.3
Total revenue		4.2			7.6			3.4			0.4			—			15.6
Cost of sales, excluding depreciation and amortization:
Cost of service		(1.0	)		(0.8	)		(0.4	)		(0.3	)		—			(2.5	)
Cost of product sales		(0.2	)		—			—			(0.1	)		—			(0.3	)
Selling, general and administrative expenses		(3.0	)		(0.7	)		(0.6	)		(2.6	)		(4.3	)		(11.2	)
Stock-based compensation expense		(0.1	)		(0.1	)		(0.1	)		—			(0.7	)		(1.0	)
Acquisition and integration related transaction expenses		—			—			—			—			(1.2	)		(1.2	)
Depreciation and amortization		(7.0	)		(0.9	)		(0.6	)		(4.4	)		(0.4	)		(13.3	)
Segment operating income (loss)		(7.1	)		5.1			1.7			(7.0	)		(6.6	)		(13.9	)
Net operating loss																$	(13.9	)
Total assets at December 31, 2020	$	93.9		$	64.4		$	8.5		$	87.0		$	70.3		$	324.1
Total goodwill at December 31, 2020	$	1.4		$	48.0		$	0.4		$	33.9		$	—		$	83.7
Total capital expenditures for the three months ended June 30, 2020	$	0.6		$	1.4		$	0.6		$	0.3		$	0.7		$	3.6

Six Months Ended June 30, 2021

	Gaming			Virtual Sports			Interactive			Leisure			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	18.4		$	14.5		$	11.0		$	10.7		$	—		$	54.6
Product sales		8.6			—			—			1.1			—			9.7
Total revenue		27.0			14.5			11.0			11.8			—			64.3
Cost of sales, excluding depreciation and amortization:
Cost of service		(4.2	)		(0.8	)		(1.7	)		(3.4	)		—			(10.1	)
Cost of product sales		(5.3	)		—			—			(0.6	)		—			(5.9	)
Selling, general and administrative expenses		(10.8	)		(3.8	)		(2.3	)		(11.4	)		(10.6	)		(38.9	)
Stock-based compensation expense		(0.6	)		(0.2	)		(0.2	)		(0.2	)		(3.6	)		(4.8	)
Acquisition and integration related transaction expenses		—			—			—			—			(1.5	)		(1.5	)
Depreciation and amortization		(12.4	)		(1.8	)		(1.6	)		(8.3	)		(0.9	)		(25.0	)
Segment operating income (loss)		(6.3	)		7.9			5.2			(12.1	)		(16.6	)		(21.9	)
Net operating loss																$	(21.9	)
Total capital expenditures for the six months ended June 30, 2021	$	4.2		$	1.9		$	1.8		$	4.8		$	0.8		$	13.5

Six Months Ended June 30, 2020

	Gaming			Virtual Sports			Interactive			Leisure			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	20.7		$	15.4		$	5.5		$	16.5		$	—		$	58.1
Product sales		8.4			—			—			1.4			—			9.8
Total revenue		29.1			15.4			5.5			17.9			—			67.9
Cost of sales, excluding depreciation and amortization:
Cost of service		(5.3	)		(1.5	)		(0.6	)		(3.6	)		—			(11.0	)
Cost of product sales		(5.6	)		—			—			(0.9	)		—			(6.5	)
Selling, general and administrative expenses		(11.9	)		(1.9	)		(1.8	)		(13.6	)		(10.0	)		(39.2	)
Stock-based compensation expense		(0.2	)		(0.2	)		(0.1	)		—			(1.5	)		(2.0	)
Acquisition and integration related transaction expenses		—			—			—			—			(4.4	)		(4.4	)
Depreciation and amortization		(14.4	)		(1.7	)		(1.2	)		(7.8	)		(0.8	)		(25.9	)
Segment operating income (loss)		(8.3	)		10.1			1.8			(8.0	)		(16.7	)		(21.1	)
Net operating loss																$	(21.1	)
Total capital expenditures for the six months ended June 30, 2020	$	3.3		$	2.4		$	1.2		$	5.5		$	3.0		$	15.4

Geographic Information

Geographic information for revenue is set forth below:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in millions)				(in millions)
Total revenue
UK	$	29.9	$	9.2	$	40.8	$	47.6
Greece		3.9		2.6		6.2		7.4
Italy		0.9		1.4		2.2		3.6
Canada		0.3		—		2.1		—
Rest of world		6.5		2.4		13.0		9.3
Total	$	41.5	$	15.6	$	64.3	$	67.9

Geographic information of our non-current assets excluding goodwill is set forth below:

	June 30, 2021		December 31, 2020
	(in millions)
UK	$	93.9	$	101.8
Greece		13.3		18.2
Italy		1.8		2.1
Rest of world		9.5		9.3
Total	$	118.5	$	131.4

Software development costs are included as attributable to the market in which they are utilized.