Kambi Group revealed that it met expectations for the first quarter 2024. Both revenue and net profits were only slightly lower than last year.
The revenue for the quarter ending 31 March reached EUR43.2m ($46.2m) (PS37.1m/£46.2m). The EUR43.2m revenue reported in the first quarter of 2013 was just 1.8% less than Kambi’s EUR44.0m.
According to Kambi, this decline is consistent with the expectations of the quarter. This follows the difficult 2023 period, when CEO Kristian Nylen stated that he “was not satisfied” with their financial performance.
Nylen, however, is upbeat when he looks at the first quarter. The launch of LiveScore Group’s Kambi-powered Sportsbook in Nigeria followed by an expansion in the Netherlands are highlighted as highlights.
Nylen continued to state that Kambi’s acquisition of LiveScore by the company in October, last year, was “pivotal”. LiveScore will be launching in the UK and other markets this year.
The group stated that “the important signing of LiveScore as well as the other 2023 key partner signings were partially dependent on our delivering certain product requirements.” As part of this product delivery, we’ve been integrating external contents into the Kambi Platform, which allows operators to enhance and differentiate their products.
In Q1, we, for instance, integrated virtual sports as an important vertical complementing sports betting. More recently, we hired a third-party to enhance our horse racing offering.
With these deliveries, we are strengthening our flexibility and quality solution for partners.”
Nylen announced his resignation in the beginning of this year. Nylen is believed to have made his decision to leave Kambi because he wanted to spend more quality time with his wife and children.
Nylen intends to step down during this year upon appointment of his successor. Kambi has not yet made any announcements about a successor.
Penn Migration Impacts Performance in Q1
Looking at the Operator Turnover Index for Q1, it was 712 compared with 851 by 2023. Kambi measures the quarterly performance of partners using this tool.
Kambi explained that this decline was primarily caused by Penn’s migration to the online world in July 2023. After removing Penn’s contribution to the online business in 2023 the turnover increased by 3.0% globally and by 9% across the Americas.
The positive basketball results in the first quarter of this year accounted for a 9.0% operator trading margin. The 9.0% was higher than last year’s 8.2%.
Kambi notes also that 95% sportsbook revenues were derived during the third quarter from local regulated markets.
Profit marginally lower at EUR3.2m
Total operating costs in the first quarter were EUR29.1m, 6.7% less than they had been a year earlier. The decrease in spending on staffing, data supplies and other operational expenses was the reason for this.
Finance costs remain largely the same, but depreciation and amortization have increased. Kambi ended up with an adjusted pre-tax income of EUR4.4m. This is in line with last year’s amount.
The net profit was EUR3.2m after paying EUR1.2m tax. This is only slightly lower than Q1 2023. EBITDA was also 10.2% higher, at EUR14.1m.
What are the main highlights of this year?
In addition to Q1 results Kambi has also set out expectations for 2024, stating that it believes the year will be “transitional”.
Kambi, who is continuing his strategic initiatives to achieve long-term success, said that revenue would be affected by Penn’s migration online, the recently renewed contracts between Kindred, several partners and Kambi, as well as delayed regulations of Brazil.
Kambi’s revenue forecast for 2024 is between EUR170.0m to EUR180.0m based on this development. According to the group, revenue generated by recent partners signings will likely materialise at the end of this year. This is in addition to the organic growth that has been achieved with existing partners.
Nylen summarized, “We have built solid foundations for our future.” Our commitment to product innovation and excellence, demonstrated by our modular odds feeds is positioning Kambi in a leadership position for the future of sport betting technology.
