SBC News Voice of the Sports Betting Industry
Kambi Group Plc is confident that it will bounce back strongly from a difficult 2022 as the sportsbook technology supplier establishes new financial targets based on strategic growth areas.
Publishing its Q4 trading update, the Stockholm-listed technology group achieved corporate revenues of €57.8m, up 66% on 2021 comparative results of €35m.
Period trading saw Kambi rewarded with a €12.6m termination fee from former US partner PENN Entertainment and expected strong World Cup trading and a busy US sports calendar.
Benefitting from an “operator turnover growth of 20% year-on-year and 43% sequentially”, Kambi saw its full-year 2022 revenues recover to €166m, up 2% on 2021 results of €164m.
“In financial terms, positive momentum from previous years continued into 2022 with all-time-high revenue of €166 million, up 2% year-on-year despite tough 2021 comparatives, the impact of several headwinds and growing global economic uncertainty” – Kambi reflected in its management statement.
The group underlined the significance of Q4 trading, in which it delivered core technical upgrades on its sportsbook UX (Shape Games) and tested new algorithmic trading modules during World Cup 2022.
Commercial highlights saw Kambi secure Rei do Pitaco, the number one fantasy sports operator in Brazil, as a new sportsbook partner and agree a contract extension with key US partner Rush Street Interactive (RSI).
2022 saw Kambi’s “global sportsbook network power more than 60 online and on-property launches in key markets including Argentina, New York, Maryland and Ontario, as well as the completion of a record nine new partner signings”.
Commercial gains saw Kambi’s Q4 operating profits (EBIT) stand at €18.7m, up 167% on 2021 results of €7m. Despite its Q4 surge, full-year 2022 profits were down 39% to €35 (FY2021: €57m), reflecting a significant FY2002 margin drop to 20.9% vs 35%.
Finishing Q4 strongly, Kambi recorded a 148% increase in operating profits of €15m (after tax), helping the tech group achieve FY2022 net profit of €26.5m (FY2021: €46m)
Of consequence, EBIT and profits results were hindered by significant U$D gains against declining €UR FX during the course of 2022.
“The global economic outlook might be uncertain, but we have a proven, robust business, one which is ready to meet any challenges that lie ahead,” commented Group CEO Kristian Nylén.
“With a clear focus on the updated strategy we detailed at our Capital Markets Day, we are ready to build towards the financial targets we’ve set ourselves for the coming years.
“Looking back on the full year, it was one where Kambi was able to make significant strategic progress, whether it was securing partnership extensions with Kindred and Parx, the numerous new partners we signed, the leap forward in our UX capability through the acquisition of Shape Games, the continued modularisation of our service to increase our addressable market or the development of our algorithmic trading capability.”
Kambi enters 2023 by adopting the long-term 2027 targets to multiply revenues by 2/3x to approximately €330-500m and generate EBIT in excess of €150m.
2027 targets are set on the five key growth areas of “building platform flexibility to retain key partners – the roll-out of third generation trading software – extending its lead as number one supplier in the Americas – signing a new tier one operator across and the launch in a major regulated Asian market”.
