Kristian Nylén: Kambi’s strong product pipeline came to fruition in Q2

Kristian Nylén: Kambi’s strong product pipeline came to fruition in Q2

Kambi Group is on target to achieve its 2027 objectives, CEO Kristian Nylén informed investors following the group’s Q2 and H1 trading update, although the firm has noted some financial difficulties encountered over the past six months.

Kambi CEO Kristian Nylen
Kristian Nylén

Alongside Kambi’s Chief Financial Officer (CFO), David Kenyon, Nylén addressed details in the group’s latest financial statement that operator turnover had a ‘dampening effect’ on Kambi’s Q2 and H1 operating profit.

Kambi keeping ahead of challenges

Overall, Kambi’s Q2 revenue rose 24% year-on-year to €34.7m (Q2 2022: €42.9m) and H1 revenue by 18% to €86.9m (H1 2022: €71.5m). However, operating profit for both time periods fell by 24% to €3.7m (€4.9m) and 32% to €8.2m (€12.2m) respectively.

According to Kenyon, this could be partly attributed to foreign exchange rates. A weakening of three currencies – the USD, Swedish Krona and the Colombian peso – has had an impact on operator turnover, in turn impacting Kambi’s finances.

The CFO elaborated further: “There is clearly a correlation between the turnover and the margin. So when we report a hugely strong 9% margin, this directly impacts the level of turnover and reduces it. These are all factors that decrease, but offsetting that decrease is the 9.9% margin, which is extremely high. 

“We’ve seen strong margins in football, such as in European domestic leagues and also in the Champions League. We’ve also seen increased turnover for a bet builder product, which comes at a high margin and contributes to this strong number this quarter.”

Kambi was hampered by a ‘historically high’ betting margin during the second quarter, the firm’s leading executives remarked, but both remained confident that the Stockholm-listed B2B group is on track to achieve its 2027 growth targets.

These key objectives are, as explained by the CEO – to retain tier one partners, rollout AI-powered pricing, maintain its leading position in the Americas, sign high-profile operators across its product portfolio and tolaunch in a major regulated Asian market.

Nylén added: “For many quarters we have talked about our very strong pipeline, and we are happy to announce that it has resulted in a major signing.

Bally’s boost to Kambi expansion plans

The signing of Bally’s Corporation as a client in May was a major milestone for Kambi, with the firm’s CEO emphasising that the onboarding of another tier one operator completed a key 2023 objective for the firm.

Of particular significance for Kambi’s global ambitions, Bally’s has built up an ‘equally big’ presence both in the US market and elsewhere, Nylen asserted. 

He cited how Kambi’s new partner has driven nearly $1bn in revenue from non-US markets, and, by acquiring London-based Gamesys Group, has built up a presence in Europe. 

Meanwhile, Bally’s presence in Asia, particularly Japan, could provide Kambi with a platform to achieve its own aforementioned expansion ambitions on the continent.

For now, however, Kambi hopes to drive Bally’s status – and the status of its BallyBet sportsbook operator – into a ‘powerbrand’ in the US markets. As it stands, the Swedish firm has gone live with Bally’s in Louisiana and Mississippi, and Nylen asserted that its stateside partner will become a “strong brand in all local markets”.

“In total, Bally’s has access in eight states,” he said. “We think they can be a major player in the US, but we also really see opportunities in Europe and Asia, and also possibly in Latin America going forward.”

Global vision and the AI opportunity

In addition to its new deal with Bally’s, Q2 saw Kambi sign renewals with Colombian market leader BetPlay, its longest-running partner Paf, and prominent European player LeoVegas, now part of the MGM Resorts Group.

“I hope that we can take this partnership to another level, given their outspoken plans for expansion,” Nylen commented on the LeoVegas partnership, adding that Kambi is currently supporting the relaunch of its partners’ Nye Expekt sportsbook brand in Denmark.

Further south, post-Q2 have seen Kambi support BetWarrior’s launch in the Argentinian province of Mendoza, and the ink is currently drying on a Brazil-focused deal with Eyas Gaming.

Nylen added: “This is a great opportunity in Brazil, and as we have heard the President has signed provisional measures, so it is very likely that Brazil will be regulated within four months.”

Finally, outside of commercial partnerships, Q2 has been a quarter of investment for Kambi, notably in the area of AI-driven pricing. Nylen informed shareholders that the group plans to create a standalone AI division with ‘agility’ within the wider group, as the firm sets itself an objective to set a ‘new benchmark’ for the industry.

Nylen commented: “We believe that we are step ahead when it comes to AI-powered pricing, and we believe that this is the future and that we have something very unique here.”

Summarising Kambi’s position to investors, the CEO concluded: “To summarise the quarter, I think we have very strong commercial momentum headlined by Bally’s signing and the key renewals. 

“Our AI capability to power the next dimension of sports trading takes us to a very, very strong position. I believe we have made significant progress towards the 2027 growth drivers and our pipeline is still very strong.”

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