Affiliate and sports data firm Gambling.com Group has lowered its full-year guidance for 2026 after a difficult first quarter which failed to build on recent momentum. 

The company reported Q1 revenue of $40.4m (£30.2m), broadly flat year-on-year compared to $40.6m in the same period last year. 

However, profitability declined sharply across several key metrics as the group absorbed the impact of weaker performance in its core marketing division and increased investment into diversifying its existing product suite.

Net income swung from a profit of $11.2m in Q1 2025 to a net loss of $1.2m this quarter, while adjusted EBITDA fell 43% from $15.9m to $9m. Adjusted EBITDA margin also dropped significantly from 39% to 22%.

The NASDAQ-listed business put this decline down to regulatory headwinds, weaker organic search performance and rising operating costs; and it has now unveiled plans for a major AI-led restructuring programme.

Hopes of building on a record Q4 2025, where revenue exceeded the $35m mark in the twilight of a year for the first time, seem to have been quashed

It also revised its full-year outlook downward, now expecting 2026 revenue between $165m-$170m and adjusted EBITDA between $45m-$50m – a sharp decrease from its initial respective expectations of $170-$180m and $50m-$58m.

Despite the downturn, incoming CEO and Co-Founder Kevin McCrystle framed the results as part of a broader transformation strategy centred around AI and diversification away from reliance on search traffic.

“While our marketing operations continue to be impacted by previously disclosed poor organic search dynamics and more recent regulatory headwinds, we continue to deliver on our strategy to diversify traffic sources,” he said.

“We continue to integrate AI into our workflows and are moving quickly to adopt AI as the foundational layer of how the entire organisation operates. This shift to AI-first working principles enables a proposed restructure of teams that is expected to drive substantial annualised cost savings. 

“We are confident this transformation positions us to adapt faster to changing market needs by delivering more product and marketing innovation at a faster velocity with smaller, more flexible teams. 

“These initiatives, and the continued transition in our business to benefit from a higher mix of high-margin sports data services contributions and our more diversified marketing business, will help ensure we can build on our foundation to return to delivering consistent high margin growth going forward.”

OddsJam acquisition provides some relief

The company’s sports data services segment continued to provide a bright spot for the group during Q1. Revenue from sports data services grew 13% YoY to $11.2m, driven largely by enterprise sales growth through OpticOdds, with active partners increasing 24% quarter-on-quarter.

OpticOdds is a B2B odds and trading data product, part of the OddsJam ecosystem – a business which Gambling.com agreed to acquire back in 2024 in a deal worth up to $160m, as part of its push deeper into subscription-based sports data and betting intelligence products.

The acquisition has become increasingly important as regulatory pressures and Google search volatility continue to weigh on the affiliate sector. 

On a less positive note, Gambling.com’s marketing services revenue declined 5% to $29.2m, which the company attributed to ongoing search algorithm changes and tightening regulations in markets such as the UK and Finland.

The UK in particular continues to weigh heavily on performance – a common market for executives at gambling PLCs to bemoan in recent times. This is expected to continue as we brace for the monetary impact of the rise in Remote Gaming Duty tax to 40%. 

Gambling.com cited a “higher-than-expected increase in gaming duty” impacting both player values and betting volumes, while Finland’s evolving regulatory framework, set to come into effect in July 2027, has curtailed performance marketing activity across Europe.

Gambling.com to cut 25% of workforce as part of AI shift

The company also highlighted increased spending tied to its strategic pivot. Cost of sales rose 171% YoY to $6.1m, primarily due to investments aimed at diversifying traffic acquisition channels away from organic search dependence.

Operating expenses also increased as the business ramped up its adoption of AI technology and external marketing expenditure. Gambling.com specifically pointed to higher subscription costs linked to increased AI usage across the organisation.

That shift now forms the basis for a proposed strategic restructuring of Gambling.com, expected to reduce the company’s workforce by approximately 25%, generating annualised savings of around $13m.

Financial Times data suggests that the business currently has a workforce which is around 600-strong, meaning up to 150 members of staff could be set to lose their jobs. 

Chief Financial Officer Elias Mark said the company is moving aggressively towards “AI-first working principles”, describing AI as “the foundational layer of how the entire organisation operates”.

He added: “We expect to realise about half of the $13m in annualised savings in the second half of 2026 which will help drive margin expansion in this period and beyond. 

“As our business continues to evolve, we remain well-positioned to continue delivering substantial free cash flow that allows us to both to de-lever and further invest in new products.”

Movement in the boardroom, around the world, and on the NASDAQ

Region-by-region, Gambling.com’s main market of North America saw significant growth – up 26% YoY to $26.5m from just under $21m and accounting for two-thirds (66%) of Q1 revenue. 

It was among all of the company’s other markets where revenue decreases occurred. 

Compared to the same trading period last year, UK and Ireland revenue dipped 30% from $11.1m to $7.8m, revenue from other European operations fell 27% from $5.9m to $4.3m, and Rest of the World dropped 32% from $2.6m to $1.8m.

Despite these dips and the softer guidance, the group remains focused on long-term diversification through sports data services and new product launches. 

Management confirmed continued investment into sports data product enhancements and a new product expected to launch later this year, though only marginal revenue contribution is anticipated in 2026.

Incidentally, management structure is going through a major shakeup, with the aforementioned Co-Founder and incoming CEO McCrystle set to replace fellow Co-Founder Charles Gillespie, who will become Gambling.com’s Executive Chairman.

Upon the announcement of this change, it was said that the transition would take place in mid-May, though no announcement to confirm this has occurred has been made yet.

Gillespie has served as CEO for 20 years, leading Gambling.com from its founding in 2006 to its current position as a publicly traded global business.

The challenges of being listed

Being a PLC does not come without its burdens though, and Gambling.com shares have taken a huge hit in pre-market trading – dropping from $4.14 at market close yesterday to around $2.96 at 11:50 GMT – a drop of 28.5%. 

This continues the stock’s decline on the NASDAQ, which has been on a steady decline ever since it peaked at $16.75 in February 2025. 

As of 31 March 2026, Gambling.com held cash reserves of $8.4m alongside borrowings of $121.3m under its Wells Fargo credit facility. 

Although the group repaid $2.8m of debt during the quarter and retains $14.4m under its existing share buyback authorisation, management reiterated that strong cash generation remains important to support both deleveraging efforts and continued investment into new products and AI infrastructure.

This strong cash generation will have to be proven to investors as soon as possible, who appear to have been losing confidence in Gambling.com over the last 15 months.

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