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Shares in sportsbook supplier Kambi are trading more than 21% lower today (21 February) after the business reported declining revenue and profit in Q4 2023.

Revenue for the quarter came in at €44.3m, down 23.4% year-on-year, while the firm’s operating profit (EBIT) fell 61.5% to €7.2m.

Kambi pointed out that certain events in Q4 2022 served to make direct comparisons less accurate, however.

For example, excluding the €12.6m termination fee paid to Kambi by Penn Entertainment in Q4 2022, revenue in Q4 2023 fell by just 2% year-on-year.

It also pointed to its full-year 2023 results, which saw a year-on-year increase of 4.4% in revenue to €173.3m (or a 13% increase excluding the Q4 2022 termination fee).

Operating profit for the full year remained down year-on-year, however, as it fell from €34.8m in 2022 to €20m in 2023.

Key events

Kambi highlighted several key events that took place during the quarter in its financial report.

The business entered into long-term sportsbook platform agreements with Svenska Spel and LiveScore Group, for example, to power their respective betting brands.

The partnerships “leverage established customer bases and revenue streams, with meaningful financial impact anticipated from H2 2024,” Kambi said.

Kambi also secured two additional European sportsbook partnerships in Q4, with Dutch operator 711 and Belgian firm Bingoal.

Time to say goodbye

Following the end of the quarter, Kambi announced that co-founder and CEO Kristian Nylén would stand down from his role upon the appointment of a successor.

That news followed on from the appointment of the company’s other co-founder Anders Ström as the firm’s board chair in November 2023.

In a statement published alongside the firm’s Q4 results, CEO Nylén said he was “not satisfied” with the company’s financial performance, which was impacted by “lower than anticipated revenue from Shape Games, smaller than expected revenue contributions from two of our largest partners and Bally’s’ more measured approach to marketing its sportsbook thus far.”

He added, however, that the company made “good progress in building the foundations that will ultimately lead to a much-improved financial performance in the future.”

Those foundations include the signing and extending of Kambi’s partnership agreements, alongside improved cost control.

Nylén added that the company will continue to be negatively impacted by the slow rollout of new legal sports betting markets, including California, where it does not expect to see regulated sports betting before 2028.

“In Brazil, we welcome the long-awaited regulation of the country’s sports betting market, but are also mindful that the transition to a fully licensed framework is unlikely before Q3 2024 and that new operators will face tough competition entering what is already a mature grey market with established sports betting brands,” he added.

2024 outlook

Looking ahead to 2024, Kambi estimates that revenue for the full year will come in between €170m and €180m, representing year-on-year growth of just 1% at the range’s midpoint.

Following the announcement of his upcoming resignation, Nylén said: “I want to emphasise that our long-term strategic direction remains unchanged and I am pleased with the milestones we achieved as a business throughout 2023.

“Our resilience, strategic progress and commitment to product excellence have set us up well for the future and, as we move forward, we do so with great optimism for the journey ahead.”

Chairman Ström added that the board has initiated its search for a successor to Nylén, which is “progressing according to plan, with the aim to finalise an appointment prior to the summer period.”

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