Kambi Q1 exposed by margin declines

Kambi Group Plc stands firm in its expectation to meet its full-year 2025 targets despite Q1 trading by headwinds impacting results.

The Stockholm-listed sports betting technology group branded the Q1 period as resilient, despite performance being affected by an “almost unprecedented run of player-friendly results”.

The company generated revenue of €41.5m during Q1, marking a 4% decrease from Q1 2024’s €43.2m. Yet, Kambi pointed to underlying growth, as revenue rose by 7% when excluding “€4.4m in transition fees recorded in the prior year”.

CEO Werner Becher acknowledged the dip in financial results but reiterated the company’s commitment to long-term value creation. Becher stated that while the Q1 performance did not meet Kambi’s standards and fell short of his ambitions, the group had made meaningful operational progress.

“Our financial performance was below what should be expected of a company of Kambi’s standing and far from the future level I aspire to,” Becher detailed. 

The key factor behind the margin reduction was attributed to the NCAA March Madness tournament in the US, where top-seeded teams advanced in rare fashion, a scenario seen only once before in the tournament’s history. An unprecedented streak of player-favourable outcomes significantly compressed operator trading margins. Despite this, Kambi managed to post a 10% quarterly trading margin, thanks to strong results in European football. 

Leadership emphasised that Kambi’s expanding partner network and product diversification have reduced its vulnerability to isolated sporting outcomes. “Our growing global network reduces our exposure to such player-friendly results,” he said, underscoring the benefits of international scale.

“As set out previously, one of our main aims is to diversify Kambi’s revenue streams and reduce any reliance on a small number of large partners. The percentage of revenue generated by Kambi’s three largest partners has been declining since the inception of the company, recently falling from 45% in 2023 to 39% in 2024, as our total number of partners continues to rise.“

Margin depression saw adjusted EBITA (acq) decline 60% to €2.3m, down from €5.8m in Q1 2024, while operating profit slumped 82% to €800,000. Total expenses rose by 4%, driven in part by a €1.2m FX revaluation loss and licensing costs associated with market entry into Nevada.

Nevertheless, the group delivered a solid cash flow performance. Cash flow (excluding working capital and M&A) reached €7.7m, up 43% year-on-year. Kambi ended the quarter with cash reserves of €56.4m, reinforcing management’s confidence in the group’s financial stability and investment capacity.

Strategically, Q1 saw a number of commercial wins. Chief among them was a long-term sportsbook deal with the Ontario Lottery and Gaming Corporation (OLG), subject to final conditions being met. The Canadian state-owned operator boasts wide brand recognition and a network of around 10,000 retail outlets across Ontario.

Becher described the OLG agreement as indicative of the potential in working with state-run and monopoly operators. He noted that partnerships with ATG, the Belgian National Lottery and Svenska Spel reinforce Kambi’s credentials to serve key clients in high-compliance markets.

Strengthening 2025 outlook, Kambi amongst the leading tech providers to launch in Brazil’s newly regulated Bets market on 1 January. Brazil partners included Stake, BetMGM, BetWarrior, and KTO. The company further extended its reach with sportsbook rollouts across the US, UK, Ireland, and Bulgaria during the quarter.

Kambi reiterated its 2025 guidance, forecasting adjusted EBITA (acq) of €20–€25m and total expenses in the range of €150–155m, excluding FX impact. Management expects stronger financial performance in H2, driven by seasonal sports activity and the onboarding of new partners.

“Our commitment to delivering best-in-class sports betting solutions remains unwavering,” said Becher. “The combination of our core Turnkey Sportsbook and growing diversification provides a solid platform for future growth.”