Kambi Group Plc has reaffirmed its long-term commercial prospects following strong Q3 trading in which it has secured transformative agreements with Svenska Spel and LiveScore Group.
Publishing its Q3 2023 trading update, the Stockholm-listed sports betting technology group achieved corporate revenues of €42m, up 15% on Q3 2022 comparatives of €37m.
Headline growth was achieved despite Kambi registering a lower client turnover (betting volume) of €603m during Q3, following the exit of former US partner Penn’s online business in July.
Despite the impact of Penn’s migration on betting volumes, Kambi benefited from a deeper commercial pipeline as the technology group was able to charge “€3.4m from Penn for transition services”.
Of significance, Kambi highlighted the positive contribution of new asset Shape Games, the provider of ‘front-end technology solutions for sportsbooks’ generating fixed licensing fees of €2.6m – helping Kambi stabilise its revenue performance against headwinds.
Citing operational enhancements achieved by its Sportsbook network, Kambi experienced an increase in profitability, with Q3 operating profit (EBIT) rising to €4.6m (Q3 2022: €3.9m) at an 11.0% margin, and EBITA improving to €6m (€4.2m) at a 14.1% margin.
Kambi highlighted ‘better balanced geographical diversification’ with 94% of sportsbook revenue coming from locally regulated markets – with 50% revenues generated from the Americas, 47% from Europe, and 3% from the Rest of the World to the total operator GGR.
On a year-to-date basis, Kambi GGR stands at €129m, up 19% on YTD2022 comparatives of €108m. Yet trading on a lower YTD operating margin of 9.9%, Kambi’s operating profit (EBIT) stands at €16.7m, 2% down on 2022 results of €17m.
Despite its margin drags, Kambi underscored the significance of technology contracts secure during Q3 trading strengthening its sportsbook network with the client renewals of ATG Sweden and Rank Group.
Meanwhile, branded as ‘landmark deals’, Q3 trading saw Kambi secure primary sportsbook technology agreements with Svenska Spel and LiveScore Group – contracts expected to make a transformative impact on revenue starting from the second half of 2024.
New technology agreements with Svenska Spel and LiveScore Group see Kambi embolden its strategic outlook for 2027, In which the company targets generating revenues of €330 to €500m – representing two-to-three increase on FY2022 GGR performance, with a target EBIT of €150m.
These contracts were highlighted as ‘the most significant partner agreements with existing sports betting revenue in our history’ by Group CEO Kristian Nylen, with impact on revenues expected in H2 2024.
The group is also confident that the agreements are indicative of continuing demand for its sportsbook services across the industry, having come off the back of seven similar partnerships inked throughout the year including with Bally’s Corporation.
On the technology development side, Kambi emphasised the effect its AI-backed trading unit – now renamed as Tzeract – has had on its business, particularly regarding football trading and with plans to expand its scope to cover live football and tennis.
“Overall, I am pleased with the progress we are making with our long-term plan, across commercial and product,” Nylen concluded.
“As I have said before, the road to our 2027 goals won’t be linear and the partner signings announced in recent weeks will only be reflected in the numbers from the second half of next year.
“The long-term picture looks bright and we remain confident in our ability to deliver on our aims and cement Kambi’s position as the number one sportsbook supplier in the world.”
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Author: John Sommers
John Sommers is a distinguished figure in the world of gambling expertise, known for his deep knowledge and insightful analysis of the gaming industry. As a seasoned author, he has contributed extensively to the reputable gambling news site, TwinCasinos, focusing on providing valuable insights to English-speaking gamblers worldwide. With a career spanning over a decade, John has honed his expertise in various aspects of gambling, from strategic gameplay to industry trends and regulatory developments. His articles are revered for their blend of comprehensive research, astute observations, and a knack for demystifying complex concepts for both novice and seasoned players. Beyond his writing prowess, John has established himself as a trusted authority, often sought after for his expert commentary on the ever-evolving landscape of the casino and betting industry. His passion for responsible gambling and commitment to ensuring players make informed choices are evident in his work, making him a beacon of integrity in an industry that demands such values. Whether you’re a casual gambler or a dedicated enthusiast, John Sommers’ contributions to TwinCasinos promise to be an invaluable resource for navigating the dynamic world of gambling.
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