The impact of ‘DraftKings’ choice has been felt in Kambi’s initial quarterly financial results.
Kambi Group, a sports wagering enterprise, has reported a reduction in income and earnings for the initial three months of 2022 in comparison to the same period in the previous year.
The company’s income for the quarter was €36.9 million, representing a 14.6% decrease from €43.2 million in the first quarter of 2021.
Kambi attributed the decline primarily to a higher baseline in 2021 and new regulations in the Netherlands, which compelled some operators to withdraw from the country until obtaining new licenses.
Operator turnover, adjusted for currency fluctuations, experienced a year-on-year decrease of 31.0%. However, this was primarily attributed to DraftKings still utilizing Kambi’s technology in the first quarter of 2020. When DraftKings is excluded from the comparison, turnover witnessed an increase of 25.5%.
In terms of regional performance, the Americas accounted for 55% of total revenue during the quarter, Europe for 43%, and the remaining portion for 2%. Kambi also stated that 93% of all revenue originated from regulated markets, an increase from 87% in the previous year.
Concurrently, total operational expenditures increased by 20.4% to €29.5 million. This, in conjunction with the decline in revenue, resulted in a decrease in operating profit to €7 million.
Kambis earnings for the initial three months of 2023 dipped by 61.0% compared to the same period last year, settling at €3 million.
Financial expenses also surged by 93.2% to €286,000. Consequently, pre-tax profits for the quarter dwindled by 61.6% to €7.1 million. After settling income tax liabilities of €1.6 million, Kambi’s net profit amounted to €5.4 million, a year-on-year decrease of 64.2%.
Meanwhile, earnings before interest, taxes, depreciation, and amortization (EBITDA) plummeted by 41.5% to €13.8 million.
Among other significant developments during the quarter, Kambi successfully entered the Canadian market through a collaboration with NorthStar Gaming. This endeavor will initially concentrate on sports betting in Ontario, which opened its regulated online gambling market on April 4.
In February, Kambi declared an extension of its long-standing partnership with Kindred Group until 2026, while also securing a sports betting agreement with sports betting operator Carousel Group’s MaximBet brand. MaximBet has already commenced operations in Colorado and intends to launch in Indiana, Iowa, New Jersey, Ohio, and Pennsylvania.
During the quarter, Kambi introduced a total of 11 products in the US, including Rush Street Interactive in New York in January, Affinity Interactive in Iowa, and Parx Casino in New Jersey and Pennsylvania.
Kambi’s CEO, Kristian Nylen, remarked: “The first quarter of this year was another dynamic period for Kambi, marked by new partnership agreements, contract extensions, continued market expansion, and a number of product and technological advancements.”
Following some adjustments, the firm’s income climbed by 25%, demonstrating its robust financial standing. This occurred despite a challenging period compared to the initial quarter of 2021 and certain regulatory issues in the Netherlands. We anticipate these challenges to be resolved shortly.
The outlook for Kambi remains positive. There is substantial interest in sports wagering and the services we currently provide, as well as those we are developing for the future. This quarter, we achieved 40 partnerships, expanding and diversifying our network like never before. We believe we are only beginning to realize our full potential.
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