Sports betting services provider Kambi Group saw revenue drop 11.5% year-over-year in the second quarter of this year. The company's Q2 financial results revealed revenue of €40.5 million, falling short of its target of €41.1 million.
Key Takeaways
- Second quarter revenue totalled €40.5m, an 11.5% decline YoY.
- Adjusted EBITA was €3.7m in Q2, falling short of the company's €4.0 million target.
- CEO Werner Becher drew attention to the company's achievements in Q2 but expressed “ambition for the business being far greater.”
EBITA came in at €3.7 million, missing expectations of €4 million by almost 10%. Despite this, the company has maintained its full-year guidance, suggesting brighter days could be just around the corner for the global sportsbook partner.
It's worth noting that the recorded revenue for Q2 2024 included €4.5 million of transition fees. If we exclude this, the true revenue decline for the last three months YoY is closer to 2%. Looking at the first half of this year, revenue dropped 7.9%. However, with 2024 transition fees excluded, the group saw a revenue increase of 2.3%.
Seasonal and regulatory issues create problematic quarter for Kambi
Kambi CEO Werner Becher attributed the group's Q2 results to seasonal and regulatory difficulties. "Challenging market conditions and tough comparisons with Q2 2024” are said to have led to softer results for the last quarter.
Speaking about the complex dynamics faced by the group in the last three months, Becher explained that the period Q2 is being compared to last year “benefited from the uplift of the Euros and Copa América and included the last full quarter of transition fees from Penn Entertainment.”
In addition, the group faced “foreign exchange movements and regulatory and tax headwinds, such as deposit limits in the Netherlands and Colombia’s VAT,” all of which affected performance in Q2.
Becher drew attention to several successes seen in Q2, including the extension of its partnership with LeoVegas Group and an evolving product portfolio that will “enable [Kambi Group] to retain partners through a more extensive product offering.”
The company also agreed to a new partnership with RedCap in Latin America in Q2, in preparation for further expansion in the region.
Kambi Group’s esports betting product, powered by its Abios division, continued to grow in popularity in Q2. Becher said the “leading esports product” is “not only proving its worth on the Turnkey but is fast becoming a unique selling point for our Odds Feed+ product, with few operators possessing this capability in-house.”
Group CEO remains positive despite dissatisfaction with results
Becher was quick to praise the company’s achievements in Q2, but he didn’t hold back from expressing dissatisfaction with the results.
Commenting on the company as it stands, Becher said: “While the first half of the year played out broadly as expected, I want to reiterate that I am not satisfied with where we are at today, with my ambition for the business being far greater.”
Becher went on to explain how he expects the remaining six months of the year to play out for Kambi.
“Looking ahead to the rest of the year, the external environment will continue to pose challenges, but I remain optimistic that we can increasingly deliver value for our partners, expand our partner network, strengthen our product portfolio and position the business for long-term, sustainable growth,” Becher said.
