Kambi has its 2027 financial targets in its sights after recording a strong close to 2022 trading, reporting its highest ever full-year revenues, albeit with a reduced profit margin due to heavier expenses.
The firm ended 2022 with revenue up 2% to €166m (€162.4m), lauded as an ‘all-time high’ figure, driven by a record number of new partner signings, but an increase in administrative costs by 20% to €132.6m (€106.7m) bit into profit and EBITDA.
Profit from operations for the full year stood at €34.8m (€57m), a decline of 39%, whilst profit after tax fell 43% to €26.5m (€46.4m) and EBITDA dropped 20% from €79.2m to €63.4m.
Kambi observed that as well as admin expenses, acquisition costs relating to the €36.4m takeover of Shape Games also drove total group outflow, which led to a decline in the group’s total cash balance at the close of 2022 to €60.7m (€79.7m).
However, the group has put faith in this acquisition in particular as providing solid groundwork for future growth, stating that Shape Games has provided it with ‘unmatched native app capabilities’, sitting alongside its existing holdings such as esports odds provider Aibos.
Additionally, after encountering some difficulties in the US after the expiration of its contract with DraftKings, Kambi was able to rebound in North America by signing a range of new partners both before and after the end of 2022 trading.
“Kambi’s success in 2022 was testament to the growth of our current partners as well as the great appetite that continues to exist for the complete Kambi sportsbook,” said Group CEO Kristian Nylén.
“Across the year, Kambi signed nine new partners, extended with both Kindred Group and betPARX, made a leap forward in our front end expertise through the acquisition of Shape Games and launched our AI-powered, third generation trading capability during what was a highly successful World Cup.”
With its year-end trading bolstered by a steady stream of US revenue and heightened interest in sports betting around the FIFA World Cup, Kambi is confident in its ability to achieve its 2027 financial targets.
Breaking down Kambi’s future outlook, Nylen expressed optimism in the increasing role of third party software developers in the US betting sector, although acknowledging a trend of larger firms in-sourcing their tech production.
Kambi also predicts that the need for North American firms to provide a high-quality product to consumers, with the market being one of the most competitive globally, will also drive further demand for its offering.
The CEO continued: “Coupled with a sharpened focus on profitability throughout the industry, I believe Kambi is well positioned to become the go-to supplier for operators embarking on this journey.
“Of course, it is also important to note that we will only succeed with this strategy if we have a great set of products to sell.
“Thankfully, we set out from the enviable position of being the world’s leading complete sportsbook provider, and as we continue to modularise our sportsbook we are in turn creating more focus areas where the respective teams can work more independently than ever before, spurring innovation and enabling a faster pace of delivery.”
Outlining its strategy over the next four years, Kambi highlighted the flexibility of its sportsbook product as an area of focus, identifying demand among bettors for platforms which allow them to ‘bet on anything, at any time and in any place’.
Having outlined its financial targets at its last Capital Markets Day, Kambi continues to base future projections on five areas – the ability to flexibly use its platform for partner retention, a rollout of third gen trading, keeping its ‘number one supplier’ position in the Americas, sign tier one operators across its product portfolio and secure entry to a major regulated Asian market.
Based on these parameters, the group aims to achieve revenue of 2-3x FY2022 levels of between €330m and €500m, coupled with EBIT in excess of €150m.
The group also added that Europe, the Americas and Asia remain its core targets, specifically earmarking regulated sectors in the latter. In 2022, 94% of Kambi’s revenue was derived from regulated global markets.
Summarising 2022 as an important year for Kambi, Nylen concluded; “We strengthened our product in a variety of areas and the many opportunities we have ahead of us via both our complete service and our new open and flexible products are extremely promising.
“The year 2023 has already started in positive fashion, not least the extension we signed with Rush Street Interactive, and I believe the best is yet to come as we redefine what’s possible and build towards our long-term goals.”