Kambi Group Plc has reported a strong commercial start to 2023 trading despite its financial performance being impacted by negative FX headwinds.
Publishing its Q1 2023 trading update, the Stockholm-listed sportsbook supplier showcased strong growth in both revenue and operator turnover, generating revenues of €44m, a notable 18% increase from €36.9m in Q1 2022.
Headline growth was attributed to the improved performance of “existing partners and the launch of new markets in the Americas.”
Despite recording a revenue uptick, Kambi’s operating profit (EBIT) took a hit, amounting to €4.5m with a 10.3% operating margin, as opposed to 2021 comparatives of €7.3m and a 19.9% – The earnings drop was attributed to “foreign exchange movements and one-off costs to improve future efficiency.”
Period trading saw Kambi’s EBITA stand at €5.8m with a 13.1% margin, down from €7.7m with a 20.8% margin in Q1 2022.
Group’s cash flow (excluding working capital and M&A) for Q1 2023 amounted to €3.2m, down from €5.5m in the same period last year. Earnings per share were €0.107, compared to €0.178 in Q1 2022.
The company announced several partnership extensions during the quarter, including renewals with two of its largest clients – Rush Street Interactive (RSI), a leading operator in the Americas, and BetPlay owner Corredor Empresarial SA, the market leader in Colombia with plans to expand across Latin America.
CEO Kristian Nylén stated: “The first quarter was another busy period for Kambi, including new market launches in the Americas, the expansion of Kambi’s partner network, and a full sporting calendar.
“These events helped drive a 12% year-on-year increase in operator turnover and a 19% rise in revenue to €44m. EBITA (acq) was €5.8m, impacted by a number of factors including foreign exchange movements and one-off costs to improve future efficiency.”
“Latin America is a region of significant long-term potential for Kambi, and the company aims to extend its lead as the number one supplier across the Americas. Kambi already has a strong foothold in established sports betting markets such as Colombia and Argentina, and recent public announcements from the Brazilian government indicate that regulation of sports betting in Brazil is approaching.”
Nylen emphasized the importance of Kambi’s ongoing efforts to expand its AI-driven trading capability, a crucial element in the company’s vision to “revolutionize the sports betting landscape.”
Following a successful deployment during the FIFA World Cup in Q4, this cutting-edge approach to automated pricing, which combines machine learning and extensive data, has been extended to all major European domestic soccer leagues, including the Champions League and Europa League.
The CEO further commented: “In short, we remain steadfast in our commitment to setting a new standard for sports betting and to pioneer next-generation entertainment that eliminates friction and creates new innovative betting options for operators.
“The road towards our long-term financial targets won’t be linear, but we are carefully putting in place the fundamentals which will enable us to accelerate as we progress. With a market-leading sportsbook that continues to remove product boundaries, a strong sales pipeline, and the prospect of further regulation in key markets, I look forward to updating the market over the coming quarters.”
Q1 trading was signed off by Kambi, announcing that its group’s Annual General Meeting (AGM) is scheduled for 11 May 2023, in which the board proposes no dividends payments.