Q2 revenue ticks up for Kambi as Nylén signs off as CEO

Revenue was up 6.5% year-on-year for Kambi in the second quarter of 2024, while the sportsbook specialist kept costs down to improve its EBITDA margin. The latest financial update also marks the end of Kristian Nylén’s tenure as CEO, with Werner Becher waiting in the wings.

Revenue for the three months to 30 June at Kambi hit €45.7m (£38.5m/$49.6m), up from Q2 last year, and an improvement on Q1 this year when revenue declined marginally.

Outgoing CEO Nylén put this increase down to a busy sports calendar, with strong performances from existing partners complemented by new launches.

Wagers placed via Kambi-powered operators increased 3.1% during the quarter, although excluding the impact of Penn Entertainment migrating to its proprietary platform, turnover would have been up 20%.

Penn has been paying Kambi transition fees after completing its migration for its ESPN Bet, theScore and Hollywood Casino brands. The operator will stop paying those fees this month, meaning Kambi is forecasting a €5m reduction in revenue for the second half of 2024.

In with the new at Kambi
However, growth across other clients, helped by major sports events such as the Euro 2024 and Copa America 2024 football tournaments, drove revenue up. This was helped further by Kambi launching with two major partners before the event: LiveScore in the UK and Svenska Spel’s Oddset brand.

“These were both important accomplishments, carried out in parallel and requiring various bespoke developments,” Nylén said. “During the second half of June, activity on the Kambi platform was at its highest ever level in terms of bets processed and number of players per day, with our partners receiving an uninterrupted high-quality service throughout.”

The operator’s revenue was evenly split across Europe and the Americas during the second quarter. During Q2, 50% of revenue came from Europe, up from 44% last year. The Americas, which made up 53% of revenue in Q2 2023, declined to 46.0%, with the rest of the world making up the final 4.0%.

However, the addition of a new client in the US could reshape this again. In April, Kambi struck a deal with the Choctaw Nation of Oklahoma, operator of Choctaw Casinos & Resorts. This exclusive agreement sees Kambi provide sports betting technology and services across online and retail.

Long term, Nylén said the deal has a lot of potential. In particular, he notes how Choctaw owns gaming and hospitality destinations throughout southeastern Oklahoma, close to the Texas border.

“While Texas has yet to regulate sports betting, previous attempts to pass legislation would have seen licences tethered to the state’s sports franchises,” Nylén said. “We expect this will be the case again next year when we anticipate another effort to bring regulated sports betting to what is one of the largest states in the US.”

Net profit up 67.6% in Q2
Despite inflation pushing up prices Kambi reported a marginal decline in operating expenses to €29.7m. Staff costs were higher at $16.4m but savings were made across data costs and other operating expenses, as well as cutting losses on currency exchange.

The business ultimately improved its EBITDA margin significantly to 16.4%, compared to 11.7% last year. Operating profit jumped 67% to €6.2m, again at an improved margin of 13.5%, while net profit climbed 83% to €4.7m.

Similar success in H1 for Kambi
The first half of the year was similar to Q2, with revenue for the six months to 30 June up marginally to €88.9m and Kambi’s bottom line looking strong.

As was the case in Q2, operating costs fell – 3.9% to €58.8m – with EBITDA margin improving to 14.9%. Operating profit for the six months increased 29%, with net profit up 35% to €7.9m.

Becher waiting in the wings
Publication of the Q2 and H1 results signals the end of Nylén’s time as CEO. He is stepping down after leading the supplier since it was spun off from Kindred Group in 2010. He will, however, remain on the group’s board.

His departure was confirmed in January but it was only this month that his replacement was confirmed. Becher, formerly of Sportradar, begins his tenure tomorrow.

Werner Becher joins as Kambi begins a new era of offering modular solutions to the industry
“With vast experience from the technology and gaming industries, most recently as senior executive at global sports data supplier Sportradar, I have every confidence Werner is the right person to lead Kambi into a new era of multi-product provision,” Nylén said of his successor.

“I would like to take this opportunity to thank all Kambi employees, past and present, for their hard work and dedication during my time as CEO over the past 14 years, as well as everyone else who has supported Kambi along the way. 

“I am proud of what we have achieved together and I firmly believe the foundation we have built positions us for future success.”

2024 remains a transitional year for Kambi
However, the supplier again described 2024 as a transitional year for the business, with revenue expected in the range of €170m to €180m. It expects an impact from the Penn migration and recently renewed contracts with Kindred (another partner preparing to migrate to a proprietary platform) and other clients.

The delayed opening of Brazil’s regulated market had also slowed growth in 2024, although with that market opening from 1 January 2025, Kambi expects to gradually grow market share.

At 9am BST today, Kambi shares were trading at SEK115.50, up 12%.