The Euros and Copa America soccer tournaments were among several highlights for Kambi in a bounce-back quarter for the sports betting tech supplier.
Kamib announced on Wednesday second-quarter revenue of €45.7 million ($49.4 million), up 6.5% year over year and an improvement from the first quarter, when revenue was down roughly 2%.
The market reacted positively to the report, as Kambi’s stock closed up 14.8% to 117.90 Swedish krona on more than 3.5 times its average volume. It was the first earnings call since Kambi said it is throwing out its 2027 forecasts and will replace them at a later date.
Clients see record betting volume
Outgoing CEO Kristian Nylén attributed much of the progress to Kambi’s performance for old and new clients during a particularly busy sports calendar.
“The Euros and Copa America tournaments saw us provide all our partners with a market-leading product, enhanced by the delivery of expanded player props markets and Bet Builder capability via our AI trading division Tzeract,” Nylén said. “During the second half of June, activity on the Kambi platform was at its highest-ever levels in terms of bets processed and number of players per day, with our partners receiving uninterrupted high-quality service throughout.”
Betting volume was up 20% year over year, excluding the impact of transitioning Penn Entertainment onto its proprietary tech.
Record takeaway from soccer
Operator hold was a record 10.3% in Q2. Kambi attributed that to positive sports outcomes, mainly from the Euros, which only take place every four years.
Average operator hold for the past 12 months is 9.1%. The success of Tzeract during one of the busiest months for European bookmakers bodes well for Kambi as it expands the product to more sports.
Upon unveiling the AI-powered trading unit last November, Nylén said it would help combat the trend of sportsbooks moving tech in-house by “differentiating” Kambi’s capabilities.
Kambi client list shakes up
Adding two major partners ahead of the Euros, LiveScore in the UK and Svenska Spel in Sweden, maximized results.
“These were both important accomplishments, carried out in parallel and requiring various bespoke developments,” Nylén said. “During the second half of June, activity on the Kambi platform was at its highest ever level in terms of bets processed and number of players per day, with our partners receiving an uninterrupted high-quality service throughout.”
Monthly fees from the Penn transition end after July. Kambi said that will impact second-half revenue by €5 million ($5.4 million).
Kambi CEO talks Choctaw partnership
Meanwhile Kambi recently reached an agreement with the Choctaw Nation of Oklahoma to expand throughout the US. The group owns 8 stand-alone casinos and 15 smaller venues in southeastern Oklahoma.
Nylén noted the Choctow’s presence along the Texas border and partnership with the Texas Rangers of the MLB. Both give Kambi a path to sports betting in the Lone Star state; however, progress toward legalization has been much slower than some have hoped for.
Key markets moving slower than expected toward regulation led to Kambi scrapping its financial targets for 2027 earlier this month.
Reductions aid profit jump
Despite inflation, Kambi reported a marginal decline in operating expenses to €29.7 million ($32.8 million).
While staff costs were higher at €16.4 million ($17.9 million), this was offset by cuts to data costs and other operating expenses, as well as trimming losses on currency exchange. Kambi also reported a colossal increase in cash flow, excluding working capital and M&A, which amounted to €8.1 million ($8.9 million), an 8000% increase year over year.
Operating profit (EBIT) for Q2 2024 was up 67% year-over-year to €6.2 million ($6.8 million), with the operating margin improving to 13.5% from 8.6%.
Earnings per share were €0.155 ($0.17), up from €0.083 ($0.09) in Q2 last year.
New Kambi CEO takes over
Kambi is still viewing the rest of the year as transitional. However, as it prepares for delayed market openings, restructured partnerships and turns to new leadership.
Full-year revenue is expected to be between €170 million ($184 million) and €180 million ($195 million).
This was Nylén’s last call. In January, he told the company he wanted to step down this year. Earlier this month, Kambi named Werner Becher, formerly a CEO at global sports data supplier Sportradar, as his successor.
Becher steps into the new role on Thursday.
