Kambi CEO Kristian Nylén has reinforced the significance of adding Bally’s as a new client for its sportsbook platform in Q2 as it provided another boost to its US business.
Nylén stated that Bally’s ditching its proprietary platform for the Kambi solution “underlines the current pressures facing many in-house sports betting operations” and pointed to the strength of its own solution.
He said: “From a commercial perspective, we were delighted to welcome Bally’s Corporation to the Kambi network in Q2. As we further solidify our market leadership position, this partner win is a major milestone for the business and comes on the back of our flexible product strategy.
“As one of the world’s leading gaming operators, Bally’s commands strong brand recognition, a large customer database and expansive global footprint that has the potential to open up significant opportunities for Kambi in both the US and beyond.
“Bally’s decision to replace its proprietary sportsbook with Kambi Complete underlines the current pressures facing many in-house sports betting operations. Indeed, demand for our Complete sportsbook service remains high.”
Nylén made the comments as Kambi published its financial report for Q2, revealing total revenues of $47.5m, up 24% year-over-year. Revenue for the first half of 2023 stood at $95.2m.
These increases were attributed to a strong operator trading rate of 9.9% throughout the period, as well as the addition of the Shape Games platform.
However, despite top-line growth, Kambi’s operating took a 24% hit to just $4.1m at a margin of 8.6%. EBITDA also dropped, albeit much flatter at just a 4% decline, to $5.5m at a rate of 11.8%.
Performance was hit by the Barstool Sportsbook market share declining in most states, while Penn opted not to take up product improvements ahead of its migration to its in-house technology.
The CEO added: “The second quarter of the year was another encouraging period for Kambi as we made significant strategic progress towards executing our long-term growth strategy, including a tier-one partner signing, key partner renewals and the continued development of our AI trading capability.
“During the quarter we delivered strong revenue growth of 24% year-on-year, driven by new customers, the addition of Shape Games and a high operator trading margin. Operator turnover growth of 4% was not as strong as revenue, impacted by rising foreign exchange headwinds, the dampening effect of a high trading margin and PENN Entertainment’s year-on-year decline in US market share.”
Breaking down performance, March Madness provided a boost to Kambi’s operations as the match between the UConn Huskies and the San Diego State Aztecs was the second biggest turnover event of the quarter.
Elsewhere, baseball and tennis comprised the top three most bet on sports on the Kambi platform during the quarter.
By the end of the quarter, Kambi recorded cash flow of $0.1m, the same as in the second quarter of 2022, whilst the figure was slightly less for the full first six months of the year at $3.8m, down 39% from $6.2m the year prior.
However, the firm has made substantial moves to improve its control over its own business which has given the company confidence in its future prospects.
It has begun to transition its AI-driven pricing unit into a standalone division which has been in development since 2019. Kambi stated that this will “push sportsbook product boundaries by fully leveraging the increasing amounts of rich sports data”.
Nylén concluded his remarks on Q2 performance by commenting: “Kambi’s offering is only getting stronger as we pioneer next-generation betting entertainment, highlighted by the success of our award-winning AI-powered trading. Recognizing the powerful benefits this unique method of pricing delivers for our partners, we also see an exciting future for this service as a module, powering odds for those outside of the Kambi network.
“In summary, I am pleased with the strategic progress made in Q2 and believe Kambi is in a fantastic position moving forward. Having repaid the convertible bond held by Kindred during the quarter, we are in complete control over our strategic direction as we continue to execute our ambitious long-term strategy that I am confident will deliver value for both partners and shareholders.”
