Kambi shares spike after Q2 revenue increases 7% YoY

Kambi reported this morning, 24 July, a 7% year-on-year (YoY) rise in revenue to €45.7m, up from €42.9m in Q2 2023.

The supplier also announced that EBITDA increased 25% YoY to €16.1m, with an EBITDA margin of 16.4% – up from 11.7% the previous year.

Profit after tax leapt 83% YoY to €4.7m, with the Stockholm-listed firm reporting operating profit of €6.2m – a 67% rise from Q2 2023.

Favourable sporting results in Euro 2024 saw operator trading margin for the quarter come in at 10.3%, with Kambi noting a likely “dampening effect” on operator turnover.

Geographically, the Americas contributed 46% of sportsbook gross gaming revenue (GGR) while Europe saw 50% and Rest of the World contributed 4% of sportsbook GGR.

Key highlights for the supplier during the second quarter of 2024 included Werner Becher being announced as outgoing CEO Kristian Nylén’s replacement, effective from 25 July.

Kambi’s board also decided to withdraw its 2027 financial targets due to “slower than expected progress towards regulation in certain key markets would likely delay revenue”.

The quarter saw multiple partner launches prior to Euro 2024 with LiveScore in the UK and Svenska Spel in Sweden, while Kambi entered an exclusive nationwide partnership in the US with the Choctaw Nation of Oklahoma tribe. link

During the quarter, football was the number one turnover-driving sport due to the culmination of the European domestic leagues as well as the Champions League final, which was the top turnover event of the reporting period.

During the Germany-hosted Euros and Copa América in the US, Kambi noted the percentage of pre-match bets that were bet builders “grew from 23% during the 2022 World Cup to 30% and 33% during the Euros and Copa América, respectively, up until 30 June”, while both summer tournaments contributed approximately 15% of Q2 operator GGR.

Basketball came in second place in terms of Q2 turnover due to the college March Madness tournament and NBA Playoffs. The supplier completed an expansion of its basketball bet builder product earlier in Q2 and reported that approximately a quarter of all pre-match basketball bets were bet builders.

Tennis was the third most bet on sport of Q2, albeit with “Wimbledon starting on 1 July this year, beyond its regular late June start date”, Kambi noted.

The supplier also confirmed that Kindred Group’s exit in North America, as well as Infinity Interactive closing its sports operations in Iowa, will not impact the firm financially.

Soon-to-depart CEO Nylén commented on the Q2 results and said activity on the Kambi platform was at its highest during the second half of June, with both Euro 2024 and the Copa América leading to the number of players and bets processed per day reaching its highest ever level.

Nylén said: “In the second quarter, operator turnover increased 3% year on year, although was up 20% when excluding the impact of the PENN online migration.

“This was driven by a busy sporting calendar and the growth of new and existing partners. Operator trading margin was 10.3%, boosted by higher-than-average margin from the June games in the Euros soccer tournament.

“With operating costs broadly flat, EBIT came in at €6.2m, up 67% YoY.

Nylén also welcomed his incoming replacement: “On 1 July, I was pleased that we announced Werner Becher would be succeeding me as CEO from 25 July.

“With vast experience from the technology and gaming industries, most recently a senior executive at global sports data supplier Sportradar, I have every confidence Werner is the right person to lead Kambi into a new era of multi-product provision.

“I will be offering my full support to Werner from my new position on the board of Kambi, where I will also help guide our long-term strategy.

“I would like to take this opportunity to thank all Kambi employees, past and present, for their hard work and dedication during my time as CEO over the past 14 years, as well as everyone else who has supported Kambi along the way.

“I am proud of what we have achieved together and I firmly believe the foundation we have built positions us for future success,” the CEO concluded.

Kambi also released its H1 2024 finances at the same time which showed a 2% YoY revenue increase from €86.9m to €88.9m, along with a rise in EBITDA by 17% YoY to €30.2m.

Operating profit also rose 29% YoY for the reporting period to €10.6m, while profit after tax came in at €7.9m – a 35% YoY increase.

In its outlook, Kambi announced 2024 will be a transitional year for the firm, with revenue impacted by PENN’s online migration as well as delayed regulation of the Brazilian market, which the firm “anticipates it will gradually gain market share”.

Revenue for the full year is expected to be in the range of €170-€180m.

Following the release of Kambi’s results, the supplier’s share price surged 13% to SEK116.7 (£8.38) in early trading.