Net Income Rises 47% to $6.6 Million and
Adjusted EBITDA Increases 49% to $10.7 Million
Raises 2023 Guidance to Revenue of $95-$99
Million and Adjusted EBITDA of $33-$37 Million
Gambling.com Group Limited (Nasdaq: GAMB) (“Gambling.com Group”
or the “Company”), a leading provider of digital marketing services
for the global online gambling industry, today reported record
first quarter financial results for the three-month period ended
March 31, 2023. The Company also increased its guidance for
full-year revenue and Adjusted EBITDA.
First Quarter 2023 vs. First Quarter
2022 Financial Highlights (USD in thousands, except per
share data, unaudited)
Three Months Ended March
31,
Change
2023
2022
%
Revenue
26,692
19,585
36
%
Net income for the period attributable to
shareholders (1)
6,595
4,487
47
%
Net income per share attributable to
shareholders, diluted (1)
0.17
0.12
42
%
Adjusted net income for the period
attributable to shareholders (1)
7,551
4,487
68
%
Adjusted net income per share attributable
to shareholders, diluted (1)
0.20
0.12
67
%
Adjusted EBITDA (1)
10,673
7,186
49
%
Adjusted EBITDA Margin (1)
40
%
37
%
Cash flows generated by operating
activities
7,082
3,585
98
%
Free Cash Flow (1)
6,205
1,373
352
%
(1) For the three months March 31, 2023,
Adjusted net income and Adjusted net income per share exclude, and
Net Income and Net Income per share include, adjustments related to
our 2022 acquisitions of RotoWire and BonusFinder of $1.0 million,
or $0.03 per share. See “Supplemental Information - Non-IFRS
Financial Measures” and the tables at the end of this release for
an explanation of the adjustments and reconciliations to the
comparable IFRS numbers.
Charles Gillespie, Chief Executive Officer and Co-Founder of
Gambling.com Group commented, “Our record first quarter 2023
results exceeded internal forecasts and reflect industry-leading
organic revenue growth as well as strong profitability and cash
generation. Our performance in the first quarter demonstrates both
Gambling.com Group’s successful execution on our North American
growth initiatives and our success in generating ongoing attractive
growth in more established markets. New depositing customers
("NDCs") increased 31% from the prior-year period, helping drive
36% year-over-year revenue growth, a 49% increase in Adjusted
EBITDA to $10.7 million and an Adjusted EBITDA Margin of 40%.
“We continue to deliver strong growth in both our newer and more
established markets, with particular strength in iCasino
performance marketing revenue in many of our global markets. North
American revenue increased 33% year-over-year to $14.1 million,
despite the year-ago period including the blockbuster launch of
sports betting in New York. First quarter growth in U.K. and
Ireland, markets where we have a longer operating history, was also
impressive as we generated all-time quarterly record revenue for
the fifth consecutive quarter in those markets, with revenue rising
36% to $8.5 million. In addition, revenue from other Europe and the
rest of the world increased 51%.
“We have established a record of consistently delivering
market-leading organic revenue growth compared to our
publicly-traded peers, as well as strong Adjusted EBITDA and Free
Cash Flow. The advantages of our proprietary technology are a key
factor driving our consistent growth in established markets and our
success in addressing the high-growth North American market
opportunity. Following the strong start to the year, we are raising
our outlook for 2023 full-year revenue and Adjusted EBITDA as we
remain on track to deliver another year of strong profitable
organic growth and record financial results.”
First Quarter 2023 and Recent Business
Highlights
- North American revenue grew 33% to $14.1 million
- Delivered more than 88,000 new depositing customers
- Successfully launched operations in Ohio and Massachusetts
- Entered into a strategic media partnership with Gannett Co.,
Inc., publisher of USA TODAY
- In April 2023, paid contingent consideration of $20.0 million
of which 50% was paid in ordinary shares
- Subsequent to the end of the quarter, the Company repurchased
69,128 ordinary shares at an average price of $9.76 per share
Elias Mark, Chief Financial Officer of Gambling.com Group,
added, “Our focus on efficiency combined with operating leverage
derived from revenue growth enabled us to expand Adjusted EBITDA
Margin and grow Free Cash Flow 352% year-over-year. We are able to
continue to invest in our near- and long-term organic growth
opportunities, including the development of Casinos.com and our new
media partnership with Gannett while simultaneously delivering
impressive top-line growth, Adjusted EBITDA and Free Cash Flow
growth. Our strong cash generation and balance sheet also provides
us with the flexibility to opportunistically evaluate value
enhancing strategic transactions.”
2023 Outlook
The Company today raised its full-year 2023 guidance for revenue
of $95 million to $99 million, and for Adjusted EBITDA of $33
million to $37 million. The mid-points of the new revenue and
Adjusted EBITDA ranges reflect year-over-year growth of 27% and
45%, respectively. The Company’s guidance assumes:
- No anticipation of going live in any additional North American
markets for the balance of 2023
- No benefit from any new acquisitions
- New investments throughout 2023 for the development of
Casinos.com and support to our media partners, including Gannett
and McClatchy
- An average EUR/USD exchange rate of 1.085 throughout 2023
Conference Call Details
Date/Time:
Thursday, May 18, 2023, at 8:00 a.m.
ET
Webcast:
https://www.webcast-eqs.com/gamb20230518/en
U.S. Toll-Free Dial In:
877-407-0890
International Dial In:
+1-201-389-0918
To access, please dial in approximately 10 minutes before the
start of the call. An archived webcast of the conference call will
also be available in the News & Events section of the Company’s
website at gambling.com/corporate/investors/news-events.
Information contained on the Company’s website is not incorporated
into this press release.
About Gambling.com Group Limited
Gambling.com Group Limited (Nasdaq: GAMB) (the "Group") is a
multi-award-winning performance marketing company and a leading
provider of digital marketing services active in the online
gambling industry. Founded in 2006, the Group has offices globally,
primarily operating in the United States and Ireland. Through its
proprietary technology platform, the Group publishes a portfolio of
premier branded websites including Gambling.com, Bookies.com and
RotoWire.com. Gambling.com Group owns and operates more than 50
websites in seven languages across 15 national markets covering all
aspects of the online gambling industry, including iGaming and
sports betting, and the fantasy sports industry.
Use of Non-IFRS Measures
This press release contains certain non-IFRS financial measures,
such as Adjusted Net Income, EBITDA, Adjusted EBITDA, Adjusted
EBITDA Margin, Free Cash Flow, and related ratios. See
“Supplemental Information - Non-IFRS Financial Measures” and the
tables at the end of this release for an explanation of the
adjustments and reconciliations to the comparable IFRS numbers.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, Section 21E of the Securities Exchange Act of 1934, as
amended, and the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995, that relate to our
current expectations and views of future events. All statements
other than statements of historical facts contained in this press
release, including statements relating to our expectation to
deliver top-line and cash flow growth as well as strong
profitability in 2023 and our 2023 outlook, are all forward-looking
statements. These statements represent our opinions, expectations,
beliefs, intentions, estimates or strategies regarding the future,
which may not be realized. In some cases, you can identify
forward-looking statements by terms such as “believe,” “may,”
“estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“expect,” “predict,” “potential,” “could,” “will,” “would,”
“ongoing,” “future” or the negative of these terms or other similar
expressions that are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Forward-looking statements are based
largely on our current expectations and projections about future
events and financial trends that we believe may affect our
financial condition, results of operations, business strategy,
short-term and long-term business operations and objectives and
financial needs. These forward-looking statements involve known and
unknown risks, uncertainties, contingencies, changes in
circumstances that are difficult to predict and other important
factors that may cause our actual results, performance, or
achievements to be materially and/or significantly different from
any future results, performance or achievements expressed or
implied by the forward-looking statement. Important factors that
could cause actual results to differ materially from our
expectations are discussed under “Item 3. Key Information - Risk
Factors” in Gambling.com Group’s annual report filed on Form 20-F
for the year ended December 31, 2022 with the U.S. Securities and
Exchange Commission (the “SEC”) on March 23, 2023, and Gambling.com
Group’s other filings with the SEC as such factors may be updated
from time to time. Any forward-looking statements contained in this
press release speak only as of the date hereof and accordingly
undue reliance should not be placed on such statements.
Gambling.com Group disclaims any obligation or undertaking to
update or revise any forward-looking statements contained in this
press release, whether as a result of new information, future
events or otherwise, other than to the extent required by
applicable law.
Consolidated Statements of Comprehensive
Income (Unaudited) (USD in thousands, except per share
amounts)
The following table details the consolidated statements of
comprehensive income for the three months ended March 31, 2023 and
2022 in the Company's reporting currency and constant currency.
Reporting Currency
Constant Currency
Three months ended March
31,
Change
Three months ended March
31,
Change
2023
2022
%
2022
%
Revenue
26,692
19,585
36
%
19,013
40
%
Cost of sales
(991
)
(1,229
)
(19
) %
(1,193
)
(17
) %
Gross profit
25,701
18,356
40
%
17,820
44
%
Sales and marketing expenses
(8,038
)
(7,362
)
9
%
(7,147
)
12
%
Technology expenses
(2,223
)
(1,363
)
63
%
(1,323
)
68
%
General and administrative expenses
(5,781
)
(4,828
)
20
%
(4,687
)
23
%
Movements in credit losses allowance
(649
)
(526
)
23
%
(511
)
27
%
Fair value movement on contingent
consideration
(852
)
—
100
%
—
100
%
Operating profit
8,158
4,277
91
%
4,152
96
%
Finance income
100
828
(88
) %
804
(88
) %
Finance expenses
(563
)
(249
)
126
%
(242
)
133
%
Income before tax
7,695
4,856
58
%
4,714
63
%
Income tax charge
(1,100
)
(369
)
198
%
(358
)
207
%
Net income for the period attributable
to shareholders
6,595
4,487
47
%
4,356
51
%
Other comprehensive income
(loss)
Exchange differences on translating
foreign currencies
1,368
(1,368
)
(200
) %
(1,328
)
(203
) %
Total comprehensive income for the
period attributable to shareholders
7,963
3,119
155
%
3,028
163
%
Consolidated Statements of
Financial Position (Unaudited)
(USD in thousands)
MARCH 31, 2023
DECEMBER 31,
2022
ASSETS
Non-current assets
Property and equipment
818
714
Right-of-use assets
1,728
1,818
Intangible assets
89,834
88,521
Deferred compensation cost
30
29
Deferred tax asset
5,793
5,832
Total non-current assets
98,203
96,914
Current assets
Trade and other receivables
15,632
12,222
Inventories
75
75
Cash and cash equivalents
33,564
29,664
Total current assets
49,271
41,961
Total assets
147,474
138,875
EQUITY AND LIABILITIES
Equity
Share capital
—
—
Capital reserve
63,723
63,723
Treasury shares
(348
)
(348
)
Share options and warrants reserve
5,214
4,411
Foreign exchange translation reserve
(5,707
)
(7,075
)
Retained earnings
32,993
26,398
Total equity
95,875
87,109
Non-current liabilities
Other payables
294
290
Deferred consideration
—
4,774
Contingent consideration
11,836
11,297
Lease liability
1,439
1,518
Deferred tax liability
2,200
2,179
Total non-current liabilities
15,769
20,058
Current liabilities
Trade and other payables
5,943
6,342
Deferred income
2,032
1,692
Deferred consideration
5,100
2,800
Contingent consideration
20,162
19,378
Other liability
257
226
Lease liability
553
554
Income tax payable
1,783
716
Total current liabilities
35,830
31,708
Total liabilities
51,599
51,766
Total equity and liabilities
147,474
138,875
Consolidated Statements of
Cash Flows (Unaudited)
(USD in thousands)
Three Months Ended March
31,
2023
2022
Cash flow from operating
activities
Income before tax
7,695
4,856
Finance expenses (income), net
463
(579
)
Adjustments for non-cash items:
Depreciation and amortization
545
1,826
Movements in credit loss allowance
649
525
Fair value movement on contingent
consideration
852
—
Share-based payment expense
846
724
Income tax reimbursed
110
—
Cash flows from operating activities
before changes in working capital
11,160
7,352
Changes in working capital
Trade and other receivables
(3,863
)
(5,085
)
Trade and other payables
(215
)
1,318
Cash flows generated by operating
activities
7,082
3,585
Cash flows from investing
activities
Acquisition of property and equipment
(153
)
(143
)
Acquisition of intangible assets
(724
)
(2,069
)
Acquisition of subsidiaries, net of cash
acquired
—
(19,295
)
Payment of deferred consideration
(2,390
)
—
Cash flows used in investing
activities
(3,267
)
(21,507
)
Cash flows from financing
activities
Interest paid
(110
)
(120
)
Principal paid on lease liability
(105
)
(86
)
Interest paid on lease liability
(47
)
(50
)
Cash flows used in financing
activities
(262
)
(256
)
Net movement in cash and cash
equivalents
3,553
(18,178
)
Cash and cash equivalents at the
beginning of the period
29,664
51,047
Net foreign exchange differences on
cash and cash equivalents
347
199
Cash and cash equivalents at the end of
the period
33,564
33,068
Earnings Per Share
Below is a reconciliation of basic and diluted earnings per
share as presented in the Consolidated Statement of Comprehensive
Income for the period specified:
Three Months Ended March
31,
Reporting Currency
Change
Constant Currency
Change
2023
2022
%
%
(USD in thousands,
unaudited)
Net income for the period attributable
to shareholders
6,595
4,487
47
%
51
%
Weighted-average number of ordinary
shares, basic
36,431,633
34,877,496
4
%
4
%
Net income per share attributable to
shareholders, basic
0.18
0.13
38
%
50
%
Net income for the period attributable
to shareholders
6,595
4,487
47
%
51
%
Weighted-average number of ordinary
shares, diluted
38,121,794
37,214,074
2
%
2
%
Net income per share attributable to
shareholders, diluted
0.17
0.12
42
%
42
%
Supplemental Information
Rounding
We have made rounding adjustments to some of the figures
included in the discussion and analysis of our financial condition
and results of operations together with our consolidated financial
statements and the related notes thereto. Accordingly, numerical
figures shown as totals in some tables may not be an arithmetic
aggregation of the figures that preceded them.
Non-IFRS Financial Measures
Management uses several financial measures, both IFRS and
non-IFRS financial measures in analyzing and assessing the overall
performance of the business and for making operational
decisions.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
EBITDA is a non-IFRS financial measure defined as earnings
excluding interest, income tax (charge) credit, depreciation, and
amortization. Adjusted EBITDA is a non-IFRS financial measure
defined as EBITDA adjusted to exclude the effect of non-recurring
items, significant non-cash items, share-based payment expense,
foreign exchange gains (losses), fair value of contingent
consideration, and other items that our board of directors believes
do not reflect the underlying performance of the business including
acquisition related expenses, such as acquisition related costs and
bonuses. Adjusted EBITDA Margin is a non-IFRS measure defined as
Adjusted EBITDA as a percentage of revenue.
We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful
to our management team as a measure of comparative operating
performance from period to period as those measures remove the
effect of items not directly resulting from our core operations
including effects that are generated by differences in capital
structure, depreciation, tax effects and non-recurring events.
While we use Adjusted EBITDA and Adjusted EBITDA Margin as tools
to enhance our understanding of certain aspects of our financial
performance, we do not believe that Adjusted EBITDA and Adjusted
EBITDA Margin are substitutes for, or superior to, the information
provided by IFRS results. As such, the presentation of Adjusted
EBITDA and Adjusted EBITDA Margin is not intended to be considered
in isolation or as a substitute for any measure prepared in
accordance with IFRS. The primary limitations associated with the
use of Adjusted EBITDA and Adjusted EBITDA Margin as compared to
IFRS results are that Adjusted EBITDA and Adjusted EBITDA Margin as
we define them may not be comparable to similarly titled measures
used by other companies in our industry and that Adjusted EBITDA
and Adjusted EBITDA Margin may exclude financial information that
some investors may consider important in evaluating our
performance.
Below is a reconciliation to EBITDA, Adjusted EBITDA from net
income for the period attributable to shareholders as presented in
the Consolidated Statements of Comprehensive Income and for the
period specified:
Three Months Ended March
31,
Reporting Currency
Change
Constant Currency
Change
2023
2022
%
%
(USD in thousands,
unaudited)
Net income for the period attributable
to shareholders
6,595
4,487
47
%
51
%
Add back (deduct):
Interest expenses on borrowings and lease
liability
43
170
(75
) %
(74
) %
Income tax charge
1,100
369
198
%
207
%
Depreciation expense
57
43
33
%
36
%
Amortization expense
488
1,783
(73
) %
(72
) %
EBITDA
8,283
6,852
21
%
25
%
Share-based payment expense
846
724
17
%
20
%
Fair value movement on contingent
consideration
852
—
100
%
100
%
Unwinding of deferred consideration
54
—
100
%
100
%
Foreign currency translation losses
(gains), net
327
(776
)
(142
) %
(143
) %
Other finance results
39
27
44
%
50
%
Acquisition related costs (1)
222
359
(38
) %
(36
) %
Employees' bonuses related to
acquisition
50
—
100
%
100
%
Adjusted EBITDA
10,673
7,186
49
%
53
%
(1)
The acquisition costs are related to
historical and potential business combinations of the Group.
Below is the Adjusted EBITDA Margin calculation for the period
specified stated in the Company's reporting currency and constant
currency:
Three Months Ended March
31,
Reporting Currency
Change
Constant Currency
Change
2023
2022
%
%
(USD in thousands,
unaudited)
Revenue
26,692
19,585
36
%
40
%
Adjusted EBITDA
10,673
7,186
49
%
53
%
Adjusted EBITDA Margin
40
%
37
%
In regard to forward looking non-IFRS guidance, we are not able
to reconcile the forward-looking non-IFRS Adjusted EBITDA measure
to the closest corresponding IFRS measure without unreasonable
efforts because we are unable to predict the ultimate outcome of
certain significant items including, but not limited to, fair value
movements, share-based payments for future awards,
acquisition-related expenses and certain financing and tax
items.
Adjusted Net Income and Adjusted Net Income Per Share
Adjusted net income is a non-IFRS financial measure defined as
net income attributable to equity holders excluding the fair value
gain or loss related to contingent consideration, unwinding of
deferred consideration, and certain employee bonuses related to
acquisitions. Adjusted net income per diluted share is a non-IFRS
financial measure defined as adjusted net income attributable to
equity holders divided by the diluted weighted average number of
common shares outstanding.
We believe adjusted net income and adjusted net income per
diluted share are useful to our management as a measure of
comparative performance from period to period as these measures
remove the effect of the fair value gain or loss related to the
contingent consideration, unwinding of deferred consideration, and
certain employee bonuses, all associated with our acquisitions,
during the limited period where these items are incurred. We expect
to incur gains or losses related to the contingent consideration
and expenses related to the unwinding of deferred consideration and
employee bonuses until December 2023. See Note 5 of the
consolidated financial statements for the three months ended March
31, 2023 for a description of the contingent and deferred
considerations associated with our acquisitions.
Below is a reconciliation to Adjusted net income attributable to
equity holders and Adjusted net income per share, diluted from net
income for the period attributable to the equity holders and net
income per share attributed to ordinary shareholders, diluted as
presented in the Consolidated Statements of Comprehensive Income
(Loss) and for the period specified stated in the Company's
reporting currency and constant currency:
Three Months Ended March
31,
Reporting Currency
Change
Constant Currency
Change
2023
2022
%
%
(USD in thousands, except for
share and per share data, unaudited)
Net income for the period attributable
to shareholders
6,595
4,487
47
%
51
%
Fair value movement on contingent
consideration(1)
852
—
100
%
100
%
Unwinding of deferred consideration
(1)
54
—
100
%
100
%
Employees' bonuses related to
acquisition(1)
50
—
100
%
100
%
Adjusted net income for the period
attributable to shareholders
7,551
4,487
68
%
73
%
Weighted-average number of ordinary
shares, basic
36,431,633
34,877,496
4
%
4
%
Net income per share attributable to
shareholders, basic
0.18
0.13
38
%
50
%
Effect of adjustments for fair value
movements on contingent consideration, basic
0.03
0.00
100
%
100
%
Effect of adjustments for unwinding on
deferred consideration, basic
0.00
0.00
100
%
100
%
Effect of adjustments for bonuses related
to acquisition, basic
0.00
0.00
100
%
100
%
Adjusted net income per share
attributable to shareholders, basic
0.21
0.13
62
%
75
%
Weighted-average number of ordinary
shares, diluted
38,121,794
37,214,074
2
%
2
%
Net income per share attributable to
ordinary shareholders, diluted
0.17
0.12
42
%
42
%
Adjusted net income per share
attributable to shareholders, diluted
0.20
0.12
67
%
67
%
(1)
There is no tax impact from fair value
movement on contingent consideration, unwinding of deferred
consideration or employee bonuses related to acquisition.
Free Cash Flow
Free Cash Flow is a non-IFRS liquidity financial measure defined
as cash flow from operating activities less capital expenditures,
or CAPEX.
We believe Free Cash Flow is useful to our management team as a
measure of financial performance as it measures our ability to
generate additional cash from our operations. While we use Free
Cash Flow as a tool to enhance our understanding of certain aspects
of our financial performance, we do not believe that Free Cash Flow
is a substitute for, or superior to, the information provided by
IFRS metrics. As such, the presentation of Free Cash Flow is not
intended to be considered in isolation or as a substitute for any
measure prepared in accordance with IFRS.
The primary limitation associated with the use of Free Cash Flow
as compared to IFRS metrics is that Free Cash Flow does not
represent residual cash flows available for discretionary
expenditures because the measure does not deduct the payments
required for debt service and other obligations or payments made
for business acquisitions. Free Cash Flow as we define it also may
not be comparable to similarly titled measures used by other
companies in the online gambling affiliate industry.
Below is a reconciliation to Free Cash Flow from cash flows
generated by operating activities as presented in the Consolidated
Statement of Cash Flows for the period specified in the Company's
reporting currency:
Three Months Ended March
31,
Change
2023
2022
%
(USD in thousands,
unaudited)
Cash flows generated by operating
activities
7,082
3,585
98
%
Capital Expenditures (1)
(877
)
(2,212
)
60
%
Free Cash Flow
6,205
1,373
352
%
(1) Capital Expenditures are defined as
the acquisition of property and equipment and the acquisition of
intangible assets, and excludes cash flows related to business
combinations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230518005253/en/
For further information: Investors: Peter McGough,
Gambling.com Group, investors@gdcgroup.com Richard Land, Norberto
Aja, JCIR, GAMB@jcir.com, 212-835-8500
Media: Jennifer Arapoff, Gambling.com Group,
media@gdcgroup.com Jordan Bieber, 5W Public Relations,
gdc@5wpr.com
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