Kambi to revamp network following unsatisfactory 2023 results 

Kambi Group Plc has declared that it has achieved a ‘stronger foundation for growth’, following a difficult close to year-end trading which impacted its full-year 2023 results.

Publishing its Fourth Quarter and FY2023 results this morning, the Stockholm-listed sports betting technology group registered a 23% decline in Q4 revenues to €44.3m (Q42022: €58m).

The decline in period revenues was attributed to the migration of its online sportsbook contract with PENN Entertainment, initiated in July 2023. Kambi’s North American results were ‘exacerbated by a busy US sporting calendar’, resulting in a Q4 EBITDA decline of 38% to €17m (Q42022: €27m).

Excluding Penn’s online migration, Kambi informed: ‘When stripping out Penn’s online contribution in Q4 2022, turnover was up 6% across the global network and up 18% in the Americas. The operator trading margin in Q4 was 8.3%, compared to 8.1% in the same period last year.’

On an annual basis, group revenues stood at €173m, up 4% on FY2022’s corresponding results of €166m, as Kambi’s network matched the tough comparatives of FIFA World Cup 2022 trading.

Despite securing ‘ten new clients and seven sportsbook renewals’, the FY2023 results were dragged down by a ‘slow regulatory rollout in major markets’, compounding the effects of Penn migrating from its sportsbook platform. 

Year accounts saw Kambi book a €7.5m convertible bond repayment to Kindred Group Plc, a factor which led Kambi to declare an FY2023 EBITDA of €57m, down 11% on FY2022’s results of €63m.

Registering a 44% decline in FY2023 profits to €15m (FY2022: €26.5m), Kristian Nylén, the outgoing CEO of Kambi, noted ‘unsatisfactory financial results’ in a challenging year for the company navigating complex industry challenges.

Nylén remarked: ”As I look back on the year, I have two overriding takeaways. The first is that I’m not satisfied with our financial performance. This was impacted by lower than anticipated revenue from Shape Games, smaller than expected revenue contributions from two of our largest partners, and Bally’s measured approach to marketing its sportsbook thus far.

“My second reflection is that we made good progress in building the foundations that will ultimately lead to a much-improved financial performance in the future, giving me confidence we’re on the right path for the long-term.”

2024 will see Kambi refresh its sportsbook network by adding the tier-one client LiveScore Group and becoming the full-service sportsbook supplier for the Swedish state-owned gambling group Svenska Spel. ”These partnerships leverage established customer bases and revenue streams, with meaningful financial impact anticipated from H2 2024.”

The supplier’s US prospects are underlined as Penn online declines will be offset by Kambi’s chief sportsbook supplier agreement with Bally’s Corporation, which is optimised by improved UX and Bet Builder integrations for North American sports markets.

Announced this February, Penn retained Kambi as the principal sports betting technology supplier for its retail venues “such as kiosks, point-of-sale terminals, odds boards, and Bring Your Own Device technology.” 

Strengthening its network, Kambi will launch a new modularisation strategy for clients to benefit from its new risk management platform Tzeract, and the services of Abios (esports) and Shape Games (UX).

“Based on these developments, Kambi estimates revenue for 2024 to be in the range of €170 – €180 million. Kambi expects revenue from recent partner signings to materialise towards the end of the year, in addition to organic growth from existing partners.”

Year trading was concluded with an update by new Chairman Anders Ström, on the board’s election of a forthcoming CEO: ‘Following the announcement regarding our CEO in January 2024, the Board of Kambi has initiated the process of seeking a successor. 

“The search is progressing according to plan, with the aim to finalise an appointment prior to the summer period. In the meantime, the company’s progress towards its long-term strategic objectives remains uninterrupted.”