Kambi reports 24% surge in Q2 revenue but profit slides
Supplier highlights how deal struck with Bally’s to power its relaunched retail and mobile sportsbook will “further solidify” Kambi’s position in the US
Kambi has attributed the acquisition of Shape Games and operator trading margin of 9.9% to a 24% year-on-year (YoY) rise in Q2 2023 revenue to €42.9m (£36.8m).
In its financial report released today, 26 July, the supplier also revealed revenue for the first six months of 2023 reached €86.9m, up from €71.5m.
Meanwhile, EBITDA rose 11% in Q2 to €12.9m, with operating profit (EBIT) falling by a quarter to €3.7m. Operating margin also fell 14.1% YoY, with profit after tax down 24% YoY from €3.3m to €2.5m.
Regarding operational achievements, Kambi highlighted its new global sportsbook partnership with Bally’s, replacing the Rhode Island-based operator’s proprietary sports betting technology for Bally Bet and had made significant progress with the incubation of its AI pricing division.
Additionally, the supplier extended its partnerships with BetPlay, LeoVegas and Paf.
Kambi also repaid the €7.5m convertible bond, which Kindred Group previously held, and it had also repurchased 381,476 shares for a total of €7.2m.
Kambi CEO Kristian Nylén commented: “During the quarter, we delivered strong revenue growth of 24% YoY, driven by new customers, the addition of Shape Games and a high operator trading margin.
“Operator turnover growth of 4% was not as strong as revenue, impacted by rising foreign exchange headwinds, the dampening effect of a high trading margin and Penn Entertainment’s year-on-year decline in US market share.”
Nylén spoke about the firm’s deal with Bally’s and said it would “further solidify” its market position in the US. “As one of the world’s leading gaming operators, Bally’s commands strong brand recognition, a large customer database and an expansive global footprint that has the potential to open up significant opportunities for Kambi in both the US and beyond.
“Bally’s decision to replace its proprietary sportsbook with ‘Kambi Complete’ underlines the current pressures facing many in-house sports betting operations. Indeed, demand for our Complete sportsbook service remains high, further evidenced by our sales pipeline and the Q2 renewals of key partners BetPlay, LeoVegas Group and Paf.”
Nylén went on to discuss how the second quarter sets up the firm for further progress for the rest of the year.
“In summary, I am pleased with the strategic progress made in Q2 and believe Kambi is in a fantastic position moving forward. Having repaid the convertible bond held by Kindred during the quarter, we are in complete control over our strategic direction as we continue to execute our ambitious long-term strategy that I am confident will deliver value for both partners and shareholders.”
After the quarter, a sports betting supply deal was struck with Brazil-facing football media site Lance!, while Penn migrated its Barstool Sportsbook off the Kambi platform in all US states where the app was operational.
However, Kambi will continue to receive revenue share from the retail operation until 2024 when it will be taken in-house.
Kambi’s shares were initially down 3.5% to SEK191.4 in early morning trading on the Nasdaq Nordic Stock Exchange before recovering their early losses.