In a stellar display of growth, Gambling.com Group has announced record-breaking revenue for the first quarter, marking a significant 9.4% increase compared to the same period last year. Despite the unique growth spurts seen in the first quarter of 2023, the company’s financial performance has outpaced expectations, impressively highlighting its resilience and strategic foresight.
Elias Mark, Gambling.com Group’s Chief Financial Officer, proudly pointed out that the surge in revenue came in spite of the challenges presented by fewer state launches in 2024 compared to the previous year. “By growing year on year in every one of our geographic reporting markets, we delivered record Q1 revenue with top-line growth of 9% despite the comparable period benefiting from significantly more new state launch activity,” said Mark.
In a pivotal move last year, Gambling.com entered into a multi-year strategic partnership with U.S. media giant Gannett Co., leveraging Gannett’s extensive presence across America. This strategic move has undoubtedly contributed to the company’s sustained growth and market penetration.
Reflecting on the Q1 2024 results, Charles Gillespie, CEO and co-founder of Gambling.com Group, noted that the company’s longstanding investments are yielding tangible benefits. “The investments we have made for years in our proprietary technology, website portfolio, and accretive acquisitions are driving consistent growth,” Gillespie elaborated. He further emphasized the company’s optimism in its potential for generating substantially higher Adjusted EBITDA and Free Cash Flow as it continues expanding its leadership and influence in the global online gambling markets.
A significant highlight of the first quarter was the securing of a $50.0 million credit facility, which included a $25.0 million revolving credit facility and a $25.0 million term loan facility. Additionally, the company successfully delivered 107,000 new depositing customers and commenced operations in North Carolina, where online sports betting was launched on March 11.
Delving into the company’s market-specific performance, the Other Europe segment witnessed a revenue jump of 39.3% to $3.8 million. Meanwhile, the Rest of World segment saw a substantial 29.2% increase in revenue. Progress in North America and UK and Ireland was similarly strong, with UK and Ireland reaching $8.9 million in revenue, up 4.6%, and North America revenue growing by 4.7% to $14.8 million.
In terms of revenue segmentation by monetization type, performance marketing led the way, generating a staggering $23.3 million. The advertising and other segment accounted for $3.8 million in revenue, experiencing a 26.5% increase, whereas subscription and content syndication rose by 5.1% to $1.9 million.
Examining the revenue by product type, the Casino segment generated $19.8 million, representing a 16.0% growth. However, the Sports and Other segments experienced declines; Sports revenue dipped by 0.6% to $9.1 million and the Other segment saw a significant 37.0% decrease to $268,000.
The exponential increase in cost of sales, rising by 125.3% to $2.2 million, left the gross profit at $26.9 million, marking a 5.0% improvement year-on-year. Sales and marketing expenses were the highest cost at $9.6 million, followed by general and administrative expenses at $6.3 million and technology expenses at $3.2 million. With $40,000 movements in credit losses allowance considered, the operating profit stood at $7.8 million, reflecting a 3.2% decrease.
Despite this, finance income soared to $944,000 from $100,000 in Q1 2023, partially offset by $454,000 in finance expenses, leading to a profit before tax of $8.3 million, up 7.6%. Following an income tax charge of $1.0 million, the net profit for the quarter was $7.2 million, indicating a 10.6% rise.
However, Adjusted EBITDA for the quarter was $10.2 million, marking a year-on-year decline of 4.8%. Consequently, the company adjusted its 2024 revenue and Adjusted EBITDA guidance. The updated estimates for fiscal year revenue now range between $118 million and $122 million, down from the earlier projection of $129 million to $133 million. Similarly, Adjusted EBITDA is now forecasted between $40 million and $44 million, compared to the previously announced $44 million to $48 million. This adjustment was attributed to changes in how Google handles commercial content on high authority websites, which has diminished the effectiveness of the company’s media partnerships.
In conclusory remarks, Gillespie expressed confidence in the company’s ability to achieve its targets despite the evolving digital landscape. “Even with these shifts, the strength and resilience of our business will enable us to deliver strong year-over-year Adjusted EBITDA and Free Cash Flow growth. With less competition in the search engine results pages, our owned and operated assets are better positioned for the long term than ever before,” Gillespie affirmed.
