Kambi Group remains confident in its full-year prospects, despite a dip in Q3 revenues, as its B2B services are to be bolstered by the recent acquisition of Shape Games.
The B2B sportsbook supplier’s Q3 update, published this morning, revealed revenue of €36.7m (Q3 2021: €41.6m), a year-on-year decline 11.7%, whilst operating profit decreased by 73% to €3.9m (€14.7m), with a margin of 10.6% (35.4%).
Year-to-date results meanwhile, saw revenue stand at €108.2m – a 15% drop on 2021 earnings of €127.5m – and operating profit of €16.1m – an 67.8% decline on €50m, at a margin of 14.9% compared to 39.2% the previous year.
Despite setbacks, Kambi ultimately remains in profit for the quarter, and sought to highlight key achievements including a 12% increase in operator turnover, driven by partner signings and market launches.
“The third quarter is always the most challenging for the sports betting industry given the quiet sporting calendar and this year was no exception,” said Kristian Nylén, Kambi CEO.
“It was also a quarter marked by growing global economic uncertainty and higher cost of living, trends which show little sign of subsiding any time soon.
“Despite this, Kambi proved its resilience once more and I am pleased to report another busy quarter for the business with operator turnover growth of 12%.”
Q3 trading was rounded off with September’s acquisition of frontend developer Shape Games for €38.5m, which Nylem detailed had deeply enhanced Kambi’s UX capability.
In an interview with SBC News immediately following the takeover last month, Nylen – alongside Shape CEO Christian Risom – stated that the integration would grant the firm the ‘important native element’ for effective differentiation, localisation, personalisation and empowerment.
“This is a landmark deal for Kambi for many reasons,” Nylen reiterated in Kambi’s Q3 statement. “Crucially, it gives us the fully-fledged, native front end capability at a time when the front end experience is a more vital part of the sports betting value chain than ever before.
“Having worked closely with Shape Games on various projects in recent years, I have seen first-hand the strength of their technology and the level of expertise they possess, and I am pleased to welcome such a profitable and rapidly growing business to the Kambi Group.
“The acquisition will not only complement our turnkey solution but it also aligns with our modularisation strategy with the front end module set to be sold as a standalone service outside of the existing network, thereby increasing our total addressable market.”
Further afield, Kambi continued to put faith in its American operations, having signed deals to support the sportsbook ambitions of the ilani and Mohegan Casino Resorts and Oaklawn Racing Casino Resort in North America.
South American prospects saw the company clinch a major partnership with Ondiss, subsequently providing its sports betting services to the Argentine BetWarrior, Casino Magic and Casino Club brands.
Nylem added that the group’s Bet Builder product has also been launched for the NBA, the last major US tournament, and the CEO believes that this product will enable Kambi to stand out from its competition in North America whilst adding to its modularisation strategy.
“Unlike our key competitors, Kambi’s Bet Builder was created as part of the core sportsbook, thereby benefiting from our expertise in areas such as competitive pricing, unique user experience and risk management, creating a compelling product for operators to integrate,” he added.
The group’s faith in the Americas marks a continued trend from the second quarter, in which it also acknowledged difficult comparatives with the previous year, but also signed several new partners in the stateside and Canadian sectors.
Although closing the quarter and January-September period with diminished cash flow of €1.8m (€11.9m) and €7.3m (€39.8m) respectively, Nylen and Kambi have detailed confidence in the group’s progress following the takeover of Shape Games, North American momentum and a busy sports schedule ahead.
“Our future is looking promising, operating from a strong position as we enter an economic recession which, while it will no doubt present challenges, may prove positive for B2B businesses such as Kambi in the long term,” the CEO concluded.
“When also taking into consideration the recent start of the US basketball season and a World Cup still to come, we look forward to ending 2022 on a high before embarking on an exciting 2023.”
Source: SBC News
