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Anders Ström, Kambi Chair, and Kristian Nylén, Group CEO, have reflected on a year of strategic and operational progress, as 2023 saw a shift in the firm’s business model.
Addressing investors, the duo reflected on a year which saw €173.3m in revenue, multiple operator signings and partnership extensions, as well as sportsbook launches, amongst other successes.
Speaking of the Stockholm-listed sports betting technology group’s corporate governance model, which moved towards a more active and involved Board of Directors, Ström said: “This approach is a shift from the Swedish model of a more detached Board we previously adhered to, and is an inherent development considering that we are a Maltese company.”
Meanwhile, Ström also explained how this was further bolstered by the additions of Kristian Nylén and Benjie Cherniak to the Board, who brought ‘enhanced industry competence’.
“I for my part hope to win the AGM’s confidence as Chair and attain the privilege to lead the Board through 2024, a year I am convinced will see Kambi gaining greater effectiveness,” he said.
However in January, the board of Kambi Group announced that Nylén had expressed his intention to step down as CEO of the company.
Nylén, who co-founded Kambi in 2010, will resign from leadership duties upon the appointment of a successor, as the Board initiates a search for a new CEO.
Under his leadership, Kambi has become the industry’s leading provider of B2B sportsbook technology systems, serving over 40 customers including Kindred Group, LeoVegas, Rush Street Interactive and Bally’s Interactive.
On this, Ström – who only took on Chair duties himself from the outgoing Lars Stugemo back in November – noted that a ‘crucial responsibility’ for the Board this year is the recruitment of a new CEO for Kambi, with this process expected to conclude before the summer.
Reviewing 2023 trading, Nylén said: “We significantly strengthened the Kambi sportsbook network by welcoming 10 new partners, including major industry players such as Bally’s Corporation, LiveScore Group and Svenska Spel Sport & Casino (Svenska Spel).
“These landmark partnerships show just how far our product and commercial strategy have come. From enabling Bally’s to potentially acquire elements of our source code to Shape Games building a bespoke front end for Svenska Spel, Kambi is taking product flexibility to the next level and, together with our partners, we will continue to push the boundaries of what is possible in sports betting.”
Additionally, from a financial perspective, Nylén believes that Kambi showcased resilience as a business last year, with revenue increasing 13% to €173.3m when excluding the one-off termination fee from Penn recorded in Q4 2022.
He said: “However, we acknowledge that this falls short of the high expectations we set ourselves, with revenue impacted by several factors including 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 since its launch.”
Nylén acknowledged that challenges will continue to exist, including a slower roll-out of newly regulated sports betting markets, but reaffirmed his belief that the strategic progress the company made in 2023 has ‘laid the foundations for a more prosperous future’.
Furthermore, Ström highlighted the board’s duty of creating value for Kambi’s shareholders.
He committed: “Part of our capital allocation priorities includes our share buyback programs, aimed at achieving added value to our shareholders, giving the Board increased flexibility with Kambi’s capital structure, including using them to settle share options.”
Kambi repurchased 462,076 shares during the year for a total of €8.3m, which represent 1.5% of the outstanding shares in the company. Ström attributed this to the firm’s ‘robust balance sheet’.
Other highlights for the company in 2023 included 60+ sportsbook launches across multiple markets in Europe, Latin America and the US. Kambi also repaid the full €7.5m convertible bond previously held by Kindred Group to give Kambi full control over its future strategic direction.
Ström continued: “We previously communicated that 2024 is anticipated to be a transitional year for Kambi. Due to the evolving nature of regulation and its influence on new business opportunities, Kambi must consistently review future expectations.”
Nonetheless, the Chair explained that this does not alter Kambi’s future ambitions and strategic direction, despite the challenges posed.
“I am personally excited about the ongoing AI implementation across various aspects of our operations and offerings,” said Ström, adding that the company is at the forefront of utilising AI with an aspiration to further improve machine learning models that can not only run sportsbooks autonomously but also learn on their own.
“I am confident that our models for leveraging AI will lead to even higher effectiveness in our operations and be directly reflected in our performance and results,” he concluded.
Having concluded 2023 in a strong position, Kambi is clearly confident in its prospects moving forward, underpinned by a focus on leveraging innovative technology as it continues to navigate various high-value markets.
