During the three months to 30 September, the technology supplier saw underlying turnover grow by 9% when excluding the impact from Penn’s online migration. The US operator terminated its agreement with Kambi and began using its own propriety technology in July 2023.
The business saw revenue growth of 15% year-on-year, boosted by non-recurring fees in relation to Penn and Shape Games. Revenue during the quarter was at €42.1m ($44.4m/£36.6m) compared to €36.7m in Q3 2022.
Kambi completed 24 partner launches during Q3, including eight in the US for new partner Bally’s Corporation in the states of Arizona, Colorado, Mississippi, New Jersey, Ohio and Virginia.
Outside of the US, Kambi continued to extend its reach in Latin America with the launch of Eyas Gaming’s Lance! Betting brand in Brazil and further launches for BetWarrior in Argentina. It also went live in the UK with the BetMGM brand in partnership with LeoVegas Group.
Kambi’s geographical diversification
Kambi’s Operator Turnover Index – which measures the performance of its clients – was down 6% year-on-year to 602 following the migration of Penn. The index is down considerably on the 1056 of Q1 2021, prior to the departure of DraftKings which also chose to pursue its own propriety technology.
In Q3 2023, Americas contributed 50% (53%), Europe 47% (43%) and Rest of the World 3% (4%) of the total operator GGR. This, Kambi said, is evidence of healthy geographical diversification.
Kambi said it expects its flagship new deals with Svenska Spel and LiveScore Group to drive revenue from the midpoint of next year. The agreements with the Swedish operator and giant sports media operator were both signed after the end of the trading period.
Total expenses for the third quarter of 2023 were up 14.3% to €37.5m. Kambi said this was below the guidance issued in the previous quarterly report due to contract renegotiations resulting in reduced data supplier costs and certain staff-related costs being lower than anticipated.
EBITDA during the period was up 3% to €13.9m at slightly uplifted margin of 11.0%. EBITA (acq), which covers acquired intangible assets, increased by €1.7m year-on-year primarily due to the increase in revenue.
This was offset by additional operating expenses including €2.2m in relation to the newly acquired Shape Games and foreign exchange losses. Excluding foreign exchange movements, EBITA (acq) increased year-on-year from €3.3m to €6.3m.
Nylén welcomes Kambi’s “landmark signings”
While satisfied with the business’ “robust” performance during the quarter, CEO Kristian Nylén focussed his attention on the projected impact of Svenska Spel and LiveScore.
He said: “The landmark signings of Svenska Spel and LiveScore Group are Kambi’s most significant partner agreements with existing sports betting revenue in our history and represent a major step forward towards our long-term strategic goals.
“As well as being fantastic agreements in their own right, these partnerships reflect the wider demand we see for our Complete sportsbook service, with them coming shortly after the signing of Bally’s Corporation, along with seven other partner signings during the year.
“This demand is, in part, due to the enhanced differentiation capabilities we have built over the years. Both LiveScore Group and Svenska Spel are established operators with strong brands, large customer bases and meaningful existing revenue, therefore it was crucial for them to be able to offer their sportsbook their way, aligned with their brand and packaged specifically for their customers.
“It’s also worth highlighting the operators’ commitment to and belief in the outsourced sportsbook model, laying the foundation for long and successful partnerships.”
2027, here we come…
Nylén is confident that Kambi’s progress during the quarter and since puts it on track to achieve the long-term financial targets set out in January. The 2027 financial targets are revenue of 2-3x FY2022 levels (approximately €330m to €500m) and EBIT in excess of €150m.
He said: “Overall, I am pleased with the progress we are making with our long-term plan, across commercial and product. As I have said before, the road to our 2027 goals won’t be linear and the partner signings announced in recent weeks will only be reflected in the numbers from the second half of next year.
“The long-term picture looks bright and we remain confident in our ability to deliver on our aims and cement Kambi’s position as the number one sportsbook supplier in the world.”
Original article: https://igamingbusiness.com/finance/kambi-welcomes-robust-growth-following-penn-departure/
