Kambi benefits from US expansion in H1
Sports betting solutions provider Kambi has reported a 25.3% year-on-year increase in revenue for the first six months of 2019, with the business boosted by its customers launching in Pennsylvania’s online wagering market.
Revenue grew to €42.6m (£38.0m/$47.5m), aided by a trio of launches in the regulated Pennsyvlania market in the three months ended June 30, 2019.
Having processed the first legal online bet in New Jersey in the prior year, Kambi achieved the same feat in the neighbouring state, with Rush Street’s PlaySugarHouse.com site.
“It was during Q2 last year that the US Supreme Court decided to repeal the country’s federal sports betting ban, a judgment I said at the time would create significant business opportunities for Kambi,” the supplier’s chief executive Kristian Nylén said. “Looking back over the past 12 months, I’m proud to say we’ve built a robust US-facing business with a fantastic portfolio of partners, and I continue to have great confidence in our future prospects.
“As the number of regulated states steadily increases over the coming years, so too will the number of attractive opportunities,” he continued. “The fact Kambi has proven its ability to deliver in the US, coupled with our ongoing US investments in people and products, puts us in a good position to convert the best of these opportunities.”
It also supported William Hill’s launch in the regulated Swedish market, after the operator rebranded the Redbet.se site, acquired through its purchase of MRG Group, in late April. According to Kambi’s Turnover Index, operator turnover was up 26% year-on-year.
The second quarter also saw Kambi strike a long-term supply agreement with igaming startup BetWarrior, which aims to launch in Latin American and European markets. A roll-out is expected before the end of 2019.
Finally, the supplier expanded its partnership with Bulgarian operator National Lottery JSC, to continue powering its 7777.bg site and launch in the Moldovan market.
Over the six months to June 30, personnel expenses rose 32.8% to €16.9m, with the supplier’s headcount increasing to 771 full-time employees. Amortisation expenses climbed 12.9% to €4.6m, with other operating expenses growing to €16.0m.
This left an operating profit of €5.1m, up 17.2% year-on-year. After investment income of €19,000 and finance costs of €306,000, Kambi posted a pre-tax profit of €4.9m.
Once income tax of €1.3m was paid, profit for the first half stood at €3.6m, up 11.2%. After a currency translation adjustment of €749,000 was factored in, income stood at €2.8m, up 4.3% year-on-year.
For the second quarter of the year, revenue was up 22.7% at €21.6m. After increased staff costs (€8.6m), amortisation (€2.4m) and other operating expenses (€8.1m), operating profit was up 4.5% at €2.5m. Profit for the quarter was down 4.6% year-on-year, as a result of higher finance costs, of €149,000, and income tax of €813,000.
After a €659,000 foreign exchange loss, comprehensive income for the quarter was €921,000, down 30.8% year-on-year.
Following the end of the quarter, Kambi agreed an extension of its existing partnership with Rank Group, which will see it continue to power the operator’s Grosvenor Casino-branded sportsbook, and expand into the Spanish market via the Enracha brand. It has also revised its contract with Stanleybet in Romania, shifting the deal to an online-only agreement after cancelling a bespoke platform development for the retail offering.
Kambi also achieved another US first, processing the first legal land-based bet in New York State, for its partner Rush Street’s Rivers Casino property in Schenectady.
“This remains an exciting time for Kambi and I look forward to seeing what the second half of the year,” Nylén said.