Kambi ‘far from levels’ it should be at amid Q1 declines

Kambi Reports Q1 Challenges Amidst Strategic Shifts

Kambi Group plc has faced a challenging first quarter, reporting year-over-year declines in both revenue and net profit. CEO Werner Becher expressed his dissatisfaction with the company’s financial performance, acknowledging that the results are “far from the future level [he] aspires to.”

During the three months ending March 31, Kambi’s revenue reached €41.5 million (£35.3 million/$47.2 million), representing a 4% decrease compared to the same period last year. However, when excluding €4.4 million in transition fees from former clients Penn and Napoleon, revenues for Q1 2025 actually increased by 7% year-on-year.

Kambi’s Commitment to Diversifying Its Partner Network

Becher reiterated the company’s ambition to broaden its revenue streams and decrease reliance on a handful of major partners. He noted, “The percentage of revenue generated by Kambi’s three largest partners has decreased from 45% in 2023 to 39% in 2024, reflecting our growing number of partnerships.” This decline highlights Kambi’s ongoing geographic and product diversification efforts, which have more than compensated for known partner losses.

In Q1, Kambi’s partner concentration continued to decline, with Becher projecting further reductions throughout the year as the company introduces new partnerships and builds commercial momentum. Despite establishing foundations for long-term success, Becher is not satisfied with current performance, stating, “While revenue grew by 7%, adjusted for transition fees, our financial results fell short of expectations for a company of Kambi’s stature.”

Kambi’s Growth in the Americas Following Brazil’s Market Opening

Further dissecting Q1 performance, Kambi reported improved operator turnover and a stronger trading margin, both contributing positively to revenue. Nevertheless, new deposit limits in the Netherlands, increased gaming-related taxes in various jurisdictions, and revised commercial terms on renewed contracts created significant headwinds.

• Operator turnover increased by 4%, primarily driven by launches with new partners like LiveScore and Svenska Spel.
• However, challenges arose from Kindred’s market exits and heightened taxation in the Netherlands.

Kambi experienced a trading margin improvement from 9% to 10.2%, largely aided by favorable outcomes in European football leagues. Conversely, unexpected player-friendly results during the NCAA men’s basketball March Madness tournament negatively affected performance.

Geographically, Kambi reported growth in the Americas, with turnover climbing by 7%, making up 57% of total turnover. This growth was significantly bolstered by the regulated market opening in Brazil in January. In contrast, contributions from Europe dropped to 40%, while the rest of the world accounted for only 3%.

Kambi’s Net Profit Declines 58% in Q1

Gross profit, impacted by rising data supplier costs, fell by 5% to €36.3 million. While Kambi successfully reduced staffing costs, other operating expenses increased compared to the previous year, and the company reported a €1.2 million currency exchange loss.

Due to the revenue decline, operating profit plummeted 82% to €809,000. After paying €238,000 in income tax, Kambi reported a net profit of €798,000, representing a substantial 77% decrease. However, it should be noted that Kambi also recognized a €739,000 gain related to employee defined benefits.

Adjusted EBITDA (acq) was 60% lower than in 2024, standing at €2.3 million. Notably, Kambi has revised the name of this alternative performance measurement to enhance clarity regarding the items excluded from comparability, previously labeled simply as adjusted EBITDA.

Becher reaffirmed Kambi’s dedication to providing best-in-class sports betting solutions: “Our commitment remains steadfast, and we are focused on nurturing long-term partnerships that deliver mutual benefits. In summary, I am confident in our strategic direction, the strength of our premium product suite, and the dedication of the entire Kambi team. As we implement our long-term strategy, I am excited about our potential not only to reinforce our market-leading position but also to cultivate a more sustainable, diversified business that enhances shareholder value.”