Kambi's Impressive Q3 2023 Performance

Kambi's underlying turnover showed a remarkable increase of 9% during the three months leading up to September. This growth excludes the impact of Penn's online migration. Notably, Penn, a major US operator, decided to terminate its agreement with Kambi and transition to using its proprietary technology in July 2023. Despite this change, Kambi's revenue saw a year-on-year growth of 15%. The third-quarter revenue reached €42.1 million, compared to €36.7 million in Q3 2022.

During Q3 2023, Kambi successfully launched 24 new partners, including eight in the United States for their new partner, Bally's Corporation. These launches took place in various states, including Arizona, Colorado, Mississippi, New Jersey, Ohio, and Virginia. Beyond the US market, Kambi continued to expand its presence in Latin America with the introduction of Eyas Gaming's Lance! Betting brand in Brazil and further launches for BetWarrior in Argentina. Additionally, they went live in the UK in partnership with the BetMGM brand, collaborating with the LeoVegas Group.

Kambi has strategically diversified its geographical reach. The Kambi Operator Turnover Index, which measures the performance of its clients, experienced a 6% year-on-year decrease following the migration of Penn and the departure of DraftKings, which pursued its own proprietary technology. In Q3 2023, the Americas contributed 50% of the total operator GGR, Europe contributed 47%, and the Rest of the World contributed 3%, showcasing healthy geographical diversification.

Kambi anticipates that its newly signed deals with Svenska Spel and LiveScore Group will significantly contribute to its revenue from the middle of the next year. These agreements were signed after the end of the trading period.

Total expenses for the third quarter of 2023 increased by 14.3% to €37.5 million, which was below the guidance issued in the previous quarterly report. This was due to contract renegotiations that resulted in reduced data supplier costs and lower staff-related costs than anticipated. EBITDA during the same period increased by 3% to €13.9 million, with a slightly uplifted margin of 11.0%. EBITA (acq), which covers acquired intangible assets, increased by €1.7 million year-on-year primarily due to the growth in revenue. This was offset by additional operating expenses, including €2.2 million in relation to the newly acquired Shape Games and foreign exchange losses. Excluding foreign exchange movements, EBITA (acq) increased year-on-year from €3.3 million to €6.3 million.

CEO Kristian Nylén expressed his satisfaction with the business's "robust" performance during the quarter. He emphasized the significance of the agreements with Svenska Spel and LiveScore Group, considering them as Kambi's most significant partner agreements in its history. He also highlighted the operators' commitment to the outsourced sportsbook model, which sets the stage for long and successful partnerships.

Nylén remains confident in Kambi's ability to achieve its long-term financial targets and solidify its position as a leading sportsbook supplier worldwide.