Kambi Group PLC, a leading sports betting supplier, has reported a strong financial performance for the second quarter and first half of 2024. With significant increases across revenue, operating profit, and cash flow, the company is positioned for continued growth despite regulatory challenges.
Quarterly Revenue and Profit:
In Q2 2024, Kambi achieved revenue of €45.7 million ($49.4 million), marking a notable increase of 6.5% compared to the same quarter last year. This growth reflects the company’s ability to enhance its market share and operational efficiency.
Operating profit (EBIT) for the quarter soared to €6.2 million, a remarkable 67.6% increase from Q2 2023. The operating margin improved significantly, climbing from 8.6% to 13.5%. This upsurge in profit indicates a robust operational performance and effective cost management.
EBITA (acquisition-adjusted earnings before interest, tax, and amortization) reached €7.5 million in Q2, a 50% rise year-on-year. For the first half of 2024, EBITA was €13.3 million, up 23.1% compared to the same period in 2023. These figures underscore the company’s strong financial health and operational efficiency.
Cash Flow:
Kambi’s cash flow, excluding working capital and mergers and acquisitions, was €8.1 million for Q2 2024. This represents a substantial increase of 297% from the previous year. For the first half of 2024, cash flow totaled €13.5 million. The impressive rise in cash flow highlights Kambi’s improved liquidity and financial stability.
Earnings Per Share (EPS):
Earnings per share for Q2 2024 were €0.155, reflecting a remarkable 86.7% increase from Q2 2023. For the first half of 2024, EPS stood at €0.260, up 36.8% compared to the same period last year. This increase in EPS demonstrates enhanced shareholder value and overall company profitability.
New Partnerships and Market Expansion:
In Q2 2024, Kambi secured an exclusive nationwide partnership with the Choctaw Nation of Oklahoma. This strategic alliance aims to expand Kambi’s footprint in the U.S. market, particularly through Choctaw Casinos & Resorts. This move aligns with Kambi’s strategy to tap into the growing U.S. sports betting market.
The company also successfully launched sportsbook services for LiveScore in the UK and Svenska Spel in Sweden ahead of the UEFA European Championship (Euros). These launches are expected to drive further revenue and enhance Kambi’s market presence in key regions.
Corporate Changes:
On the corporate front, Werner Becher will succeed Kristian Nylén as CEO effective July 25, 2024. Becher, who previously served at Sportradar, brings valuable experience to Kambi. This leadership transition is expected to steer Kambi towards new strategic directions and operational improvements.
Withdrawal of 2027 Financial Targets:
Kambi’s Board has decided to withdraw its 2027 financial targets due to slower-than-expected progress towards regulatory approvals in key markets. This decision reflects the ongoing challenges in the regulatory landscape, which may impact the company’s long-term strategic goals.
Share Buyback Program and Capital Allocation Policy:
The company completed its fourth share buyback program and announced a new long-term capital allocation policy. This policy is designed to return capital to shareholders and reflects Kambi’s commitment to enhancing shareholder value. The share buyback and capital allocation strategies are part of Kambi’s broader approach to capital management and shareholder return.
Q1 vs. Q2 2024:
Comparing Q1 2024 to Q2 2024, Kambi’s revenue increased from €43.2 million to €45.7 million, reflecting a 5.8% growth quarter-on-quarter. Operating profit improved from €4.4 million to €6.2 million, showcasing a strong recovery and operational efficiency in the second quarter. Cash flow saw a significant rise of 68.75% in Q1, while Q2 reported an even more substantial increase.
Year-on-Year Performance:
Kambi’s year-on-year performance demonstrates solid growth across various financial metrics. Revenue, operating profit, and EPS have all seen considerable improvements, indicating strong business performance and effective strategic execution.
UEFA European Championship:
The UEFA European Championship had a positive impact on Kambi’s financial performance, contributing to higher-than-average margins from June games. The busy sporting calendar and the Euros tournament played a role in driving increased operator turnover and revenue.
Choctaw Nation Partnership and Other Launches:
The exclusive partnership with Choctaw Nation and the launches of new sportsbook services are pivotal in Kambi’s growth strategy. These developments are expected to enhance Kambi’s market share and operational footprint, particularly in the U.S. and European markets.
Kambi’s strong financial performance in the first half of 2024, coupled with strategic partnerships and corporate changes, positions the company well for continued growth. Despite regulatory challenges, Kambi remains committed to enhancing shareholder value through strategic capital management and operational efficiency.