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Although Q1 2024 revenue met its own expectations, Kambi revealed it is reviewing its 2027 financial targets due to a slowdown in sports betting regulation.

Topline numbers

Kambi generated revenue of €43.2m in Q1 2024, marking a slight decline of 2% compared to the same period last year.

Approximately 90% of this revenue came from sportsbook operations, with the remainder coming from modularised odds feeds.

However, despite the dip in revenue, Kambi’s EBITDA saw an increase of 10% year-on-year, as it reached €14m.

The operating profit for the quarter stood at €4.4m, down 2% from the previous year, with a margin of 10.2%.

Earnings per share for the quarter were €0.107, and the board proposed no dividend payout.

In Q1 2024, Kambi’s operator turnover index, which measures the quarterly turnover of its clients, decreased 16.3% compared to Q1 2023, predominantly impacted by the migration of Penn’s online business in July 2023.

When stripping out Penn’s online contribution in Q1 2023, turnover was up 3% across the global network and up 9% in the Americas.

The operator trading margin in Q1 came in at 9% driven by favourable basketball results, compared to 8.2% in the same period last year.

Penn and LiveScore

In Q1, Kambi extended its retail sportsbook partnership with Penn until 31 December 2025, replacing the previous agreement set to end in July 2024.

Additionally, Kambi partnered with Inspired Entertainment, a provider of virtual sports products, to integrate the company’s offering into its sportsbook platform, in line with Kambi’s wider strategy to open up its platform and deliver for partners through third-party services.

Kambi CEO Kristian Nylén, who announced his intention to step down once a successor is appointed, expressed satisfaction with the Q1 results.

He highlighted the successful launch of LiveScore Group’s Kambi-powered sportsbook in Nigeria and the Netherlands.

Looking ahead, Nylén anticipates further launches, particularly in the UK, in preparation for upcoming sporting events like Euro 2024 and Copa América.

“LiveScore was a pivotal signing for Kambi in 2023, and these launches mark crucial milestones toward our long-term objectives,” he said.

Open platform and modularisation

Nylén mentioned that Kambi has made good progress in opening up its platform to provide greater flexibility and choice for partners.

An initial step in this process was integrating external content into the Kambi platform to meet product requirements for certain partner signings in 2023.

In Q1, Kambi added Inspired Entertainment’s virtual sports games to the platform, creating an additional revenue stream.

More recently, the firm integrated racing provider BetMakers, enhancing Kambi’s horse and greyhound racing products.

“Having made great strides on opening up our platform to deliver on these partner requirements, we are now picking up the pace with modularisation,” the CEO said.

This will enable Kambi to provide modular odds feeds via a single API integration, granting operators access to Kambi’s full library of sports odds.

“Our market research shows demand for such a flexible and powerful solution, with operators today having to integrate with multiple suppliers with varying degrees of quality,” he added.

As part of the ongoing modularisation strategy, Kambi announced AI trading division Tzeract’s first commercial agreement with operator kwiff yesterday (23 April).

2024 outlook

Although Nylén suggested Kambi had “built solid foundations for the future”, the company expects 2024 to be a “transitional year.”

The supplier said revenue will be impacted by Penn’s online migration, recently renewed contracts with Kindred and several other partners, and the delayed regulation of the Brazilian market.

Despite these challenges, Kambi reiterated its guidance for 2024 and estimates revenue to be in the range of €170m to €180m.

Kambi expects revenue from recent partner signings to materialise towards the end of the year, in addition to organic growth from existing partners.

Review of financial targets

However, Kambi also revealed that it is currently reviewing its 2027 financial targets, initially set in January 2023.

These targets aim for revenue growth to between €330m and €500m and an EBIT exceeding €150m, built on strategic objectives including platform flexibility and market expansion.

Continued regulation across the Americas, as well as in certain strategically important countries in Asia, would be required for Kambi to reach the targets.

“In general, the pace of sports betting regulation has slowed compared to previous years, illustrated by recent news that regulated sports betting in California is unlikely to occur in or before 2027,” Kambi said.

Kambi had assumed that California would contribute approximately €20m to €25m of revenue with minimal incremental cost in 2027.

The company said it would now revisit this projection along with all underlying assumptions that form the basis of its 2027 financial targets.

Kambi will update the market once its review has concluded.

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