Kambi's performance significantly lagging behind expectations during Q1, according to the CEO's assessment.
Revised Article:
Kambi's CEO, Werner Becher, ain't too pleased about the supplier's Q1 results, confessing it's "a damn sight from the fuckin' future level" he's aimin' for. The financial performance, which took a dive with a decrease in revenue and net profit, left him less than impressed.
Revenue for the three-month spree ended on 31st March clocked in at €41.5 million (£35.3 million/$47.2 million). That's a 4% drop compared to the year prior, as evidenced by data released by Kambi [Enrichment: 1].
Kambi shared that excluding €4.4 million of transition fees received in Q1 2025 from previous clients Penn and Napoleon, revenues increased by 7% year-on-year.
Expandin' the Client Base
On the topic of diversification, Becher reiterated Kambi's intention to broaden revenue streams and lessen its dependence on a select few big-time partners.
"The percentage of revenue generated by Kambi's three largest partners has been seein' a slow decrease since the company's inception, sliding from 45% in 2023 to 39% in 2024, as our partner count keeps growin'" Becher said [Enrichment: 4].
"This is mostly due to continued geographical and product diversification boostin' revenue, which more than covers losses from known partners. In Q1, this partner concentration took another dip, but Becher expects it to decline across the year as Kambi "brings on additional partners and commercial momentum builds" [Enrichment: 4].
However, while Becher claimed Kambi was continue to "establish foundations for long-term success" in Q1, he found the performance left much to be desired. He admitted the group had fallen short of expectations.
"While revenue increased 7%, excludin' the impact of transitions fees, our financial performance was below what a company like Kambi should be deliverin'. It ain't near the future level I'm aimin' for," Becher said [Enrichment: 2].
Growth in the Americas
Delving deeper into Q1, Kambi pointed out higher turnover and improved trading margin positively impacted revenue. However, new deposit limits in the Netherlands, higher gaming-related taxes across various jurisdictions, and fresh commercial terms of some renewed contracts took a toll.
Operator turnover lifted 4%, primarily driven by new partner launches, such as LiveScore and Svenska Spel. Yet, Kindred's exit from numerous markets, coupled with Dutch taxes, hindered progress [Enrichment: 1].
Kambi's trading margin enhanced from 9% to 10.2%, thanks to advantageous results across European football leagues. But, unusual player-friendly results in the NCAA men's basketball March Madness tournament had the opposite effect [Enrichment: 3].
Geographically, Kambi highlighted growth in the Americas, with turnover escalating 7%, accounting for 57% of total turnover. This growth was attributed to the opening of the regulated market in Brazil in January [Enrichment: 1]. In contrast, Europe's turnover contribution took a tumble to 40%, with the rest of the world at 3%.
Net Profit Dip in Q1
Gross profit after increased data supplier costs decreased 5% to €36.3 million. Kambi managed to save on staffing, but other operational expenses were higher than the previous year. It also reported a €1.2 million currency exchange loss [Enrichment: 2].
In combination with the revenue drop, operating profit plummeted 82% to €809,000. Kambi paid €238,000 in income tax, leading to a net profit of €798,000, a decline of 77%. However, Kambi also reported a €739,000 gain on employee defined benefits [Enrichment: 2].
Adjusted EBITDA (acq) also took a 60% hit compared to 2024, at €2.3 million. Kambi has re-named this alternative performance measurement to better highlight the items affecting comparability that have been excluded [Enrichment: 2].
"Our dedication to deliverin' top-notch sports bettin' solutions remains unwaverin', and we're focused on cultivatin' long-term, mutually beneficial partnerships," Becher said.
"In summary, I've got faith in our strategic direction, the strength of our premium product suite, and the efforts of the entire Kambi team. As we carry out our long-term strategy, I'm pumped about the potential to not only fortify our market-leadin' position but also build a more sustainable and diversified business that gives increased value to our shareholders," Becher concluded [Enrichment: 4].
- In 2023, Kambi's CEO, Werner Becher, aimed for a future level that was way beyond the current financial performance, which saw a decrease in revenue and net profit.
- Excluding transition fees received in Q1 2025 from previous clients Penn and Napoleon, Kambi's revenues increased by 7% year-on-year in Q1 2023, according to the company.
- Becher expressed his dissatisfaction with the Q1 financial performance, as it was below what a company like Kambi should be delivering, despite a 7% increase in revenue excluding transition fees.
- Kambi's percentage of revenue generated by its three largest partners has been decreasing since the company's inception, sliding from 45% in 2023 to 39% in 2024, as the company broadens its client base.
