Kambi has published its financial results for the second quarter and the first half of 2022, reporting year-over-year revenue and operating profit declines in both measuring periods.
Despite the losses, CEO Kristian Nylén has stated the firm has “delivered another positive quarter with underlying growth,” especially since Q2 was quieter than usual with the World Cup being moved to later this year in Q4, and that last year’s numbers were before the DraftKings migration.
Q2 and H1 Financials
For Q2, revenue for Kambi came in at $35.1m, a 19% decrease YoY from the $43.3m achieved in Q2 2021. Earlier this year in Q1, the group posted revenues of $39.19m, a 15% decrease YoY (Q1 2021: $45.88m).
Adjusting for the migration of DraftKings, operating turnover in Q2 increased by 16% due to strong US partner growth, launches in several new states including Arizona, Connecticut, and Louisiana, several partner launches in Ontario, Canada, as well as growth from existing and new partners.
Per geographical location, the Americas contributed 54% (2021: 58%) of the total operator GGR during the quarter, followed by Europe at 43% (2021: 40%) and the Rest of the World at 3% (2021: 2%).
For the year-to-date (YTD), the firm has earned a revenue of $72.5m, a 17% drop YoY on the $87.2m reported during the same period last year.
Operating profit (EBIT) for Q2 came in at $4.96m, a 70% decline YoY (2021: $16.8m) at a margin of 14.1% (2021: 38.8%). For YTD, operating profit stood at $12.4m, a 65% loss YoY (2021: $35.8m) at a margin of 17.1% (2021: 41%).
Profit after tax for the quarter came in at $4.58m (2021: $16.6m), while for the YTD, profit after tax is currently at $11.7m (2021: $35.4m).
A positive quarter with underlying growth
Commenting on the results, CEO Kristian Nylén noted that Kambi “delivered another positive quarter with underlying growth,” despite the tough 2021 comparatives and headwinds including the impact from the Netherlands, the quieter sporting calendar, and the DraftKings migration.
Nylén said: “In Q2, Kambi delivered another positive quarter with underlying growth remaining healthy and operator turnover up 16% when adjusting for the migration of DraftKings.
“This performance was achieved despite a quieter than usual sporting calendar, particularly with the soccer World Cup taking place later in the year, outside its usual Q2 starting slot.”
North American expansion
During Q2, Kambi expanded its presence across North America, going live on day one in Ontario, Canada with other launches in the US and Mexico with the likes of Rush Street Interactive, Soaring Eagle, and Churchill Downs.
The firm sealed an online agreement with Mohegan Gaming & Entertainment and its Fallsview Casino brand in Ontario, Canada. It also signed an extended deal with Greenwood Gaming and Entertainment, which owns US multi-state operator betPARX.
Elsewhere in its Q2 report, Kambi expressed confidence in its product team, which it stated is “working tirelessly” on the development of its Bet Builder offering.
The group detailed plans to boost market reach by further opening up and modularizing its platform, accelerating the production process, and creating additional revenue streams by making modules available as standalone offerings to operators outside of its network.
Nylén added: “In Q2, we hit an important milestone on this modularisation journey. As we communicated in the previous quarter, we have been focused on separating pricing functionality from our core platform and in recent weeks we were pleased to soft launch our first standalone pricing functionality for a limited number of low-tier soccer leagues.
“This functionality leverages Kambi’s recently developed Trading Gateway, serving the Kambi platform as well as potentially operators outside the Kambi network, and presents partners with an opportunity to take even more control of their offering should they wish.”
Exciting future ahead
Looking ahead, Nylén states that this is an “exciting time” for Kambi and while there is still a lot more work to do, they’re looking forward to a strong second half of the year.
In the Americas, Kambi is looking forward to the launch of the Ohio market where it can partner with multiple operators. The firm also has hopes for regulated sports betting in California, as well as the possible launch of the Brazilian and Peruvian markets.
The CEO concluded: “This is an exciting time for Kambi. The product journey we are on today along with our healthy balance sheet and positive underlying financial performance means we are on a strong footing for the future.
“We were delighted to see Kindred relaunch in the Netherlands recently and with more product launches, partner signings, and a World Cup to come, I look forward to an even greater second half of the year.”