GuruFocus -
- Revenue: $32.1 million, a third quarter record, up 37% year over year.
- Gross Profit: Increased 43% year over year to $30.4 million.
- Gross Margin: Increased to 95% from 91% in last year's third quarter.
- Operating Expenses: Increased 25% to $20.8 million.
- Adjusted EBITDA: Increased 108% year over year to $12.6 million.
- Adjusted EBITDA Margin: 39%, up from 26% a year ago.
- Adjusted Net Income: Rose 65% to $8.9 million.
- Adjusted Diluted Net Income Per Share: Increased 79% to $0.25.
- Free Cash Flow: Quarterly record of $14.2 million, up from $1.6 million last year.
- Share Repurchases: $1.3 million shares purchased during the quarter.
- Total (EPA:TTEF) Cash: $15.7 million as of September 30, 2024.
- 2024 Revenue Guidance: Raised to $125 million to $127 million, indicating 16% growth.
- 2024 Adjusted EBITDA Guidance: $46.5 million to $48.5 million, representing 29% growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gambling.com Group Ltd (NASDAQ:GAMB) achieved a third-quarter revenue record of $32.1 million, driven by a 37% year-over-year increase.
- The company raised its full-year revenue guidance, with a midpoint indicating 16% growth and adjusted EBITDA growth of 29%.
- Gross profit increased by 43% year-over-year, with a gross margin improvement to 95% from 91% in the previous year.
- The Freebets.com acquisition has been successfully integrated, contributing positively to the company's growth.
- Gambling.com Group Ltd (NASDAQ:GAMB) has repurchased over 8% of its outstanding shares, demonstrating confidence in its financial position and future prospects.
- North American revenue is expected to be down compared to 2023 due to challenging comparables and limited new state launches.
- Total operating expenses increased by 25% to $20.8 million, reflecting higher headcount and amortization expenses.
- The company faces two more quarters of challenging comparables in North America, impacting short-term growth.
- The cost of sales guidance was raised, indicating potential pressure on margins.
- There is uncertainty regarding the regulatory environment in Brazil, affecting the company's ability to aggressively enter the market.
A: Charles Gillespie, CEO, explained that about half of the growth in the UK and Ireland was organic, with the Freebets acquisition contributing significantly. The integration of Freebets was completed in six months, and the acquisition is now fully integrated into their technical platforms. The legacy revenue share from Freebets is healthy, and new player acquisitions are improving, although from a low base.
Q: How does Gambling.com Group differentiate itself from peers like Betco and Catena, especially given market challenges?
A: Charles Gillespie highlighted that Gambling.com Group raised guidance, indicating strong performance. Unlike some peers, the company focuses on an organic growth strategy rather than a roll-up strategy. They have a strong core built around technology platforms and brands, ensuring any M&A is well-integrated and strategically aligned.
Q: What is the current state of the M&A pipeline, and how does it differ domestically and internationally?
A: Charles Gillespie noted that the M&A pipeline is very active, with fewer buyers in the market, creating a buyer's market. The company is exploring opportunities beyond traditional affiliate assets, considering what else they could offer to B2C users and B2B customers, broadening their scope for potential acquisitions.
Q: What are your thoughts on the potential of sweepstakes and predictive markets from an affiliate perspective?
A: Charles Gillespie stated that sweepstakes highlight the demand for casino-style games in the U.S., potentially spurring more states to legislate iGaming. They work with sweepstakes systems that meet their KYC and legal requirements. Predictive markets have a bright future, and while they are not currently working with them, they are considering developing those relationships.
Q: How does Gambling.com Group plan to grow in the rapidly evolving U.S. sports market and the slower-growing iGaming market?
A: Charles Gillespie mentioned that iGaming in North America is performing well, with significant market share gains. While sports face some headwinds, they expect North American business to return to double-digit growth after Q1 2025. This growth is anticipated even before any new state launches or additional gaming products.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.