Kambi CEO warns of challenges after ‘transformative’ 2024

Kambi Group’s 2024 Financial Outlook: Navigating Challenges and Exploring New Opportunities

Kambi Group reported a stable revenue performance for the fiscal year ending December 31, 2024, achieving €176.4 million (£146.4 million/$185.2 million), reflecting a modest increase of 1.8% from the previous year. Despite this flat growth, Kambi’s Chief Executive Officer, Werner Becher, emphasized that the year was significant in terms of transformation and adaptation in the dynamic landscape of the gambling industry.

Becher, who took the helm in July 2024 succeeding veteran CEO Kristian Nylén, has actively outlined the company’s journey through a transitional phase. Following Nylén’s departure, there were initial concerns about Kambi’s performance, with revenue growth overshadowed by reductions in net profit and EBITDA compared to previous years.

This past year, however, saw Kambi pivot towards diversifying its revenue streams, a strategy that they have prioritized to mitigate the effects of changing market conditions and partner dynamics. As Becher pointed out, “While our revenue trajectory has shown modest growth, we have embarked on substantial initiatives to enhance our offerings.”

Marginal Growth in 2024

The modest revenue growth for Kambi can be attributed to several strategic initiatives, including the integration of Hard Rock Digital and Rei do Pitaco into the Kambi Odds Feed+ services, alongside the introduction of Bet Builder services for Kwiff. Additionally, Kambi expanded its partner base through new collaborations with KTO Group, Choctaw Nation, VIP Play Inc., and Week Creek Hospitality, while also securing renewed contracts with key partners like Rush Street Interactive, Sun International, and Penn Entertainment.

Yet, the year was not without its challenges. Kambi faced external pressures such as the online migration by Penn, newly imposed deposit limits in the Netherlands, increased gaming taxes in Sweden, and market exits by partner Kindred Group.

Bottom-Line Improvement in 2024

Kambi’s operational results showed a positive trend, with EBITDA improving by 5.5% to €59.7 million, while operating profit (EBIT) remained steady at €20.1 million, representing a margin of 11.4%. Total costs rose slightly by 2%, primarily due to restructuring expenses, which led to a 5% decline in pre-tax profit, totaling €19 million. Conversely, lower income tax liabilities in 2024 contributed to a net profit of €15.4 million, reflecting a 3.4% uptick from the prior year.

Ending the year on a strong note, Kambi reported a cash flow of €25.9 million, which is a remarkable 73% increase compared to 2023.

Mixed Results in Q4

In the fourth quarter of 2024, Kambi experienced a slight revenue increase of 0.5% year-on-year, totaling €44.5 million. This uptick was bolstered by new client engagements with Wind Creek Hospitality and VIP Play Inc. However, total expenses escalated by 3.8% to €38.5 million, leading to a significant 40% drop in pre-tax profit to €4.5 million when factoring in restructuring costs.

For the quarter, Kambi incurred €519,000 in income tax expenses, resulting in a net profit of €5.1 million—a decline of 7.3%. Additionally, EBITDA fell by 5.9% to €16 million during this period.

Looking Ahead: Expectations for 2025

As Kambi mapped out its projections for 2025, the organization offered insightful guidance indicating EBITA expectations in the range of €20 million to €25 million, which closely aligns with 2024 figures. While operational costs are anticipated to rise in specific categories, these increases are expected to be absorbed by partners, minimizing their impact on EBITA.

Kambi is optimistic about securing organic revenue growth from its operator network, particularly from the forthcoming contributions of partners like LiveScore and Svenska Spel. However, certain headwinds could affect revenue, including the conclusion of transition fees received in 2024 and the newly proposed temporary VAT on deposits in Colombia.

“Our strategic endeavors—embracing AI innovations, broadening our product suite, and implementing cost efficiency measures—paired with our new partnerships, lay a solid groundwork for future success,” Becher remarked. “The initiatives we are deploying today will position us to emerge stronger and more adaptable for sustained long-term growth.”