Kambi clears Q1 hurdles as 2022 opening is dragged by DraftKings & Dutch dramas
Kambi Group Plc maintains confidence in achieving its 2022 commercial and operating objectives, despite a tough start to year trading.
Publishing its Q1 trading results (period ending 31 March), the Stockholm-listed sports betting technology supplier registered a 15% decline in corporate revenues to €37 million (Q1 2021: €43m).
This fall in headline revenues was attributed to Kambi’s adjustment of former partner DraftKings sportsbook migration onto the US operator’s proprietary tech stack.
As such Kambi notified investors that its client turnover would be up by 25% adjusting for DraftKings migration.
Compounding the DraftKings situation, Q1 trading was further dragged by continued Dutch market restrictions, as Kambi clients froze their sportsbook operations to adhere to the KOA Regime’s ‘cooling-off command’.
Matched against tough like-for-like trading comparatives, Kambi registered operating profits (EBIT) of €7.3 million, down x2.5 on Q1 2021 results of €18.7 million – figures reflective of a period trading margin that had shrunk to 20% (Q1 2021: 43%).
CEO Kristian Nylén commented on Q1 Performance: “Operator turnover was up 25% when adjusting for the migration of DraftKings which proves the underlying financial performance of the business remains strong.
“This growth comes despite being up against tough Q1 2021 comparatives and the temporary impact of regulatory headwinds in the Netherlands, which we expect to ease soon.
“Turnover was driven by a busy US sporting calendar, including the Super Bowl and March Madness, the US college basketball championship, and I was proud to see Kambi provide its partners with a market-leading offering and platform stability unmatched by some of the most high-profile B2C sportsbooks.”
Closing a tough trading period, Kambi declared operating profits of €5.4 million down x2.7 on Q1 2021 comparatives of €15 million, reflective of cash-flow from operating and investment activities of €5.5 million (Q1 2021: €16.5m).
Navigating deep industry headwinds, Kambi remains confident in its year-outlook as Q1 trading garnered a strong commercial output, with the group extending its lead supplier sportsbook partnership with key account Kindred Group until 2026.
The firm further bolstered its North American commercial pipeline, becoming the lead systems supplier for NorthStar Gaming and MaximBet. Of significance to North American developments, Kambi obtained regulatory approval in the Canadian province of Ontario, and subsequently launched with partners on day-1 of the market opening.
“We remain steadfast in our commitment to strengthening our position as the world’s leading sportsbook and continuing to provide exciting sports betting experiences for players,” Nylen concluded
“This capability, which we demonstrate across the 40-plus regulated markets we operate in today, will be pivotal to our global success as the expansion of sports betting regulation continues the world over, in turn creating ever more exciting business opportunities.
“In short, the future looks bright for Kambi with high interest in the sportsbook and services we offer today, as well as those we are developing for tomorrow. We have reached the milestone of 40 partners during the quarter, the scale of the Kambi network has never been greater nor more diverse, and I believe we have only scratched the surface of what’s possible.”