reports Q3 financial results above expectations as revenue lifts by 37%

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Online gaming affiliate and media firm Group Ltd has revealed a higher than expected 37% growth in revenue during Q3 2021 to $10.1m which was driven, it said, by increased monetization of new depositing customers (NDC). 

The operating and financial results for the period ended September 30, 2021 also showed net income of $4.7m, or $0.13 per diluted share, compared to $2.3m, or $0.08 per diluted share, year-on-year.

Adjusted Q3 EBITDA, however, was down 14% from $4m to $3.5m year-on-year, while free cash flow of $0.8m was 81% lower than $3.9m in the corresponding period in 2020.

Updating investors, stated: “The increase (revenue) was driven by improved monetization of NDCs that we attribute to a combination of technology improvements and changes in product and market mix. NDCs decreased 4% to 27,000 compared to 28,000 in the prior year.”

CEO and Co-founder Charles Gillespie noted: “Our financial performance in the third quarter remained strong as we grew revenue by 37% compared to the prior year and, despite the third quarter being the seasonally slowest quarter of the year, delivered an adjusted EBITDA margin of 34%. 

“Importantly, after the quiet summer months of July and August, we delivered all-time-high revenue in September. With the launch of Arizona and the kick-off of the NFL season, we saw a significant uplift in US revenue in September and our US performance exceeded our internal expectations. 

“Entering the quarter with good momentum we are encouraged by the start to our seasonally stronger fourth quarter. We remain highly focused on prudently growing the company through both sustained organic growth and future accretive acquisitions which we continue to actively pursue.”

Q3 2021 has, however, proved to be a costly trading period for the group, with total operating expenses increasing by $3.8m to $7.7m compared to $3.9m in the prior year.

Said the group: “The increase was driven primarily by headcount across sales and marketing, technology, and general and administrative functions as we invest in the company’s organic growth initiatives as well as increased administrative expenses associated with operating as a public company.”

On the outlook, CFO Elias Mark said: “Our third quarter results came in a bit above our expectations and after slow summer trading our financial performance accelerated in September to close out the quarter with the best month in the company’s history. 

“Our adjusted EBITDA margin of 34% in the quarter was healthy despite a seasonally slow quarter and investments in scaling the organization for organic growth initiatives and operating as a public company. This is consistent with our prior guidance that our near-term margins may deviate from our average 40% target as we invest in our organic growth plan and pursue our M&A strategy. 

“For the full year, we are reiterating our expectation to achieve both above 40% year-on-year organic revenue growth and approximately 40% adjusted EBITDA margin. We remain in a very strong financial position after the IPO last quarter which offers us significant optionality going forward to execute our growth plan and each of our capital allocation priorities.”