Gambling.com Group Limited Reports Second Quarter 2021 Financial Results
Gambling.com Group Limited (Nasdaq: GAMB) reported a robust second quarter for 2021, with revenue rising 66% to $10.4 million, compared to $6.3 million the previous year. The company achieved a net income of $2.4 million or $0.08 per diluted share, a significant turnaround from a net loss of $0.4 million in Q2 2020. Adjusted EBITDA also increased by 46% to $5.5 million, indicating a robust Adjusted EBITDA margin of 53%. The firm anticipates achieving or surpassing its revenue growth and EBITDA targets for the full year.
- Revenue rose 66% to $10.4 million.
- Net income turned positive at $2.4 million compared to a net loss in the prior year.
- Adjusted EBITDA increased by 46% to $5.5 million, with a margin of 53%.
- Strong free cash flow at $3.1 million.
- Cash and cash equivalents increased to $17.2 million, up 108.7% year-over-year.
- Operating expenses surged by 141.4% to $7.2 million, primarily due to increased salaries and public offering expenses.
- Operating profit decreased by 3% to $3.2 million, affected by non-recurring costs.
CHARLOTTE, N.C., Aug. 26, 2021 /PRNewswire/ -- Gambling.com Group Limited (Nasdaq: GAMB) ("Gambling.com Group" or the "Company"), a leading provider of digital marketing services active exclusively in the global online gambling industry, today announced its operating and financial results for the second quarter ended June 30, 2021.
Second Quarter 2021 Financial Highlights
- Revenue of
$10.4 million ; grew66% compared to$6.3 million in the same period for the prior year - Net income of
$2.4 million , or$0.08 per diluted share, compared to a net loss of$0.4 million , or a loss of$0.02 per diluted share, in the same period for the prior year - Adjusted EBITDA of
$5.5 million ; grew46% compared to$3.8 million in the same period for the prior year, representing an Adjusted EBITDA margin of53% 1 - Free cash flow of
$3.1 million ; decreased3% compared to$3.2 million in the same period for the prior year2
Second Quarter 2021 Business Highlights
- Completed redomiciliation from Malta to the Channel Island of Jersey in May
- Successful launches of EmpireStakes.com, BetArizona.com and IllinoisBet.com which provides bettors with trusted and up-to-date state-specific gambling information to help them place safe and secure legal wagers
- Completed acquisition of two domain portfolios suitable for targeting the US market
- Subsequent to quarter end, completed successful public listing of common shares on the Nasdaq Global Market under the ticker symbol "GAMB"
- Subsequent to quarter end, announced appointment of Mr. Daniel D'Arrigo to Board of Directors
"Our second quarter results (which were our first interim financial results as a public company) were highlighted by continued strong top-line growth, and, based on our Adjusted EBITDA margins, we areamong the most profitable names in the online gambling industry," said Charles Gillespie, Chief Executive Officer and co-founder of Gambling.com Group. "Since our founding in 2006, we have built an affiliate marketing powerhouse with recognizable brands around the globe. Players trust our services to help them find a safe, fun and legal betting experience while our B2C operator clients utilize our best-in-class technology platform to support their increasingly important customer acquisition initiatives. We are incredibly excited about the next step in this journey as a public company and look forward to sharing the success with our new investors."
1 | Adjusted figures represent non-IFRS information. See "Non-IFRS Financial Measures" and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers. |
2 | Adjusted figures represent non-IFRS information. See "Non-IFRS Financial Measures" and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers. |
Second Quarter 2021 vs. Second Quarter 2020 Financial Highlights | ||||||||||||||||
THREE MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
(in thousands USD, except for | ||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) DATA | ||||||||||||||||
Revenue | $ | 10,392 | $ | 6,259 | $ | 4,133 | 66.0 | % | ||||||||
Operating expenses | (7,235) | (2,997) | (4,238) | 141.4 | % | |||||||||||
Operating profit | 3,157 | 3,262 | (105) | (3.2) | % | |||||||||||
Income (loss) before tax | 3,027 | (128) | 3,155 | n/m | ||||||||||||
Net income (loss) for the period attributable to the equity holders | $ | 2,445 | $ | (428) | $ | 2,873 | n/m | |||||||||
Net income (loss) per share attributable to ordinary shareholders, basic | 0.09 | (0.02) | n/m | n/m | ||||||||||||
Net income (loss) per share attributable to ordinary shareholders, diluted | 0.08 | (0.02) | n/m | n/m | ||||||||||||
n/m = not meaningful |
THREE MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
(in thousands USD, unaudited) | ||||||||||||||||
NON-IFRS FINANCIAL MEASURES | ||||||||||||||||
Adjusted EBITDA | 5,518 | 3,779 | 1,739 | 46.0 | % | |||||||||||
Adjusted EBITDA Margin | 53.1 | % | 60.4 | % | n/m | n/m | ||||||||||
Free Cash Flow | 3,122 | 3,229 | (107) | (3.3) | % | |||||||||||
n/m = not meaningful |
THREE MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||
2021 | 2020 | Amount | % | |||||||||||||
(in thousands, unaudited) | ||||||||||||||||
OTHER SUPPLEMENTAL DATA | ||||||||||||||||
New Depositing Customers (1) | 26 | 25 | 1 | 3.8 | % | |||||||||||
(1) | We define New Depositing Customers, or NDCs, as unique referral of a player from our system to one of our customers that satisfied an agreed metric (typically making a deposit above a minimum threshold) with the customer, thereby triggering the right to a commission for us. | |
AS OF JUNE 30, | AS OF DECEMBER 31, | CHANGE | ||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
(Unaudited) | ||||||||||||||||
(in thousands, USD) | ||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION DATA | ||||||||||||||||
Cash and cash equivalents | $ | 17,168 | $ | 8,225 | $ | 8,943 | 108.7 | % | ||||||||
Working capital (2) | 17,203 | 10,059 | 7,144 | 71.0 | % | |||||||||||
Total assets | 55,139 | 45,383 | 9,756 | 21.5 | % | |||||||||||
Total borrowings | 6,062 | 5,960 | 102 | 1.7 | % | |||||||||||
Total liabilities | 14,052 | 11,171 | 2,881 | 25.8 | % | |||||||||||
Total equity | 41,087 | 34,212 | 6,875 | 20.1 | % | |||||||||||
(2) | Working capital is defined as total current assets minus total current liabilities. | |
Revenue
Total revenue in the second quarter increased
Our revenue disaggregated by market is as follows:
THREE MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
(in thousands USD, unaudited) | ||||||||||||||||
U.K. and Ireland | $ | 5,410 | $ | 3,489 | $ | 1,921 | 55.1 | % | ||||||||
Other Europe | 2,822 | 969 | 1,853 | 191.2 | % | |||||||||||
North America | 1,408 | 1,097 | 311 | 28.4 | % | |||||||||||
Rest of the world | 752 | 704 | 48 | 6.8 | % | |||||||||||
Total revenues | $ | 10,392 | $ | 6,259 | $ | 4,133 | 66.0 | % | ||||||||
Revenue increases were primarily driven by organic growth in our U.K. and Ireland, Other Europe, and North American markets.
Our revenue disaggregated by monetization is as follows:
THREE MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
(in thousands USD, unaudited) | ||||||||||||||||
Hybrid commission | $ | 4,611 | $ | 3,238 | $ | 1,373 | 42.4 | % | ||||||||
Revenue share commission | 1,054 | 825 | 229 | 27.8 | % | |||||||||||
CPA commission | 3,558 | 2,130 | 1,428 | 67.0 | % | |||||||||||
Other revenue | 1,169 | 66 | 1,103 | 1,671.2 | % | |||||||||||
Total revenues | $ | 10,392 | $ | 6,259 | $ | 4,133 | 66.0 | % | ||||||||
Revenue increases were driven primarily by additional Hybrid commission, CPA commission and Other revenue. The increase in Other revenue was driven primarily by bonuses related to achieving certain operator NDC performance targets in the quarter.
Our revenue disaggregated by product type from which it is derived is as follows:
THREE MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
(in thousands USD, unaudited) | ||||||||||||||||
Casino | $ | 9,087 | $ | 5,570 | $ | 3,517 | 63.1 | % | ||||||||
Sports | 1,170 | 518 | 652 | 125.9 | % | |||||||||||
Other | 135 | 171 | (36) | (21.1) | % | |||||||||||
Total revenues | $ | 10,392 | $ | 6,259 | $ | 4,133 | 66.0 | % | ||||||||
Revenue increases were driven by growth in revenue from casino and sports products.
Operating Expenses | ||||||||||||||||
THREE MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||
2021 | 2020 | $ | % | |||||||||||||
(in thousands USD, unaudited) | ||||||||||||||||
Sales and marketing expenses | $ | 3,144 | $ | 1,598 | 1,546 | 96.7 | % | |||||||||
Technology expenses | 944 | 510 | 434 | 85.1 | % | |||||||||||
General and administrative expenses | 3,387 | 875 | 2,512 | 287.1 | % | |||||||||||
Allowance for credit losses | (240) | 14 | (254) | n/m | ||||||||||||
Total operating expenses | $ | 7,235 | $ | 2,997 | 4,238 | 141.4 | % | |||||||||
n/m = not meaningful |
Total operating expenses increased by
Sales and Marketing expenses totaled
Technology expenses totaled
General and Administrative expenses totaled
Earnings
Adjusted EBITDA increased by
Operating profit in the second quarter decreased
Net income in the second quarter totaled
Free Cash-flow
Total cash generated from operations of
Balance Sheet
Cash balances as of June 30, 2021 totaled
Total assets as of June 30, 2021 were
Total equity as of June 30, 2021 was
2021 – 2023 Financial Targets | |
Total Revenue Growth | ˃ Average |
Adjusted EBITDA Margin3 | ≥ Average |
Leverage4 | < Net Debt to Adjusted EBITDA 2.5x5 |
3 | Adjusted figures represent non-IFRS information. See "Non-IFRS Financial Measures" and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers. |
4 | Leverage is defined as Net Debt as a proportion of Adjusted EBITDA. |
5 | Net Debt is defined as Borrowings less Cash and Cash Equivalents. |
2021 Outlook
Elias Mark, Chief Financial Officer of Gambling.com Group, added, "Our financial results for the second quarter came in at the high end of our previously provided ranges as we reported strong growth in revenue, adjusted EBITDA, and net income compared to the prior year. We also continue to produce strong free cash flow and weremain in a solid financial position after the public offering last month. We are carrying encouraging momentum into the second half of the year. As a result, we are expecting to achieve or exceed our Revenue Growth target and Adjusted EBITDA margin target for the full year 2021 before the effects of any acquisitions and without incurring further borrowings."
Conference Call Details
Date/Time: | Thursday, August 26, 2021, at 9:00 am EST |
Webcast: | |
U.S. Toll-Free Dial In: | 877-407-0890 |
International Dial In: | 201-389-0918 |
To access the call, please dial in approximately ten minutes before the start of the call. An accompanying slide presentation will be available in PDF format within the "News & Events" section of the Company's website.
An archived webcast of the conference call will also be available in the News & Events section of the Company's website at gambling.com/corporate/investors/news-events.
For further information, please contact:
Media: Derek Brookmeyer, Gambling.com Group, media@gdcgroup.com, 616-528-0882
Investors: Ross Collins, Alpha-IR Group, investors@gdcgroup.com, 312-445-2877
About Gambling.com Group Limited
Gambling.com Group Limited (Nasdaq: GAMB) is a multi-award-winning performance marketing company and a leading provider of digital marketing services active exclusively in the online gambling industry, based on December 31, 2020 and March 31, 2021 revenue. The Company has more than 150 employees and operates from offices in Ireland, the United States and Malta. Through its proprietary technology platform, the Company publishes a portfolio of premier branded websites including Gambling.com and Bookies.com. Founded in 2006, the Company owns and operates more than 30 websites in six languages across 13 national markets covering all aspects of the online gambling industry, which includes iGaming and sports betting. Gambling.com Group is publicly traded on the Nasdaq Global Market.
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||||||||||||||||
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue | 10,392 | 6,259 | 21,909 | 10,370 | ||||||||||||
Sales and marketing expenses | (3,144) | (1,598) | (5,848) | (3,858) | ||||||||||||
Technology expenses | (944) | (510) | (1,634) | (1,045) | ||||||||||||
General and administrative expenses | (3,387) | (875) | (6,159) | (1,958) | ||||||||||||
Allowance for credit losses | 240 | (14) | 100 | (161) | ||||||||||||
Operating profit | 3,157 | 3,262 | 8,368 | 3,348 | ||||||||||||
(Losses) gains on financial liability at fair value through profit or loss | — | (2,839) | — | 2,160 | ||||||||||||
Finance income | 394 | 23 | 552 | 309 | ||||||||||||
Finance expense | (524) | (574) | (761) | (1,161) | ||||||||||||
Income (loss) before tax | 3,027 | (128) | 8,159 | 4,656 | ||||||||||||
Income tax charge | (582) | (300) | (1,248) | (351) | ||||||||||||
Net income (loss) for the period attributable to the equity holders | 2,445 | (428) | 6,911 | 4,305 | ||||||||||||
Other comprehensive income (loss) | ||||||||||||||||
Exchange differences on translating foreign currencies | 490 | 375 | (1,202) | (34) | ||||||||||||
Total comprehensive income (loss) for the period attributable to the equity holders | 2,935 | (53) | 5,709 | 4,271 | ||||||||||||
Net income (loss) per share attributable to ordinary shareholders, basic | 0.09 | (0.02) | 0.24 | 0.16 | ||||||||||||
Net income (loss) per share attributable to ordinary shareholders, diluted | 0.08 | (0.02) | 0.22 | 0.14 | ||||||||||||
Condensed Consolidated Statements of Financial Position (Unaudited) | ||||||||
JUNE 30, 2021 | DECEMBER 31, 2020 | |||||||
ASSETS | ||||||||
Non-current assets | ||||||||
Property and equipment | 610 | 515 | ||||||
Intangible assets | 23,566 | 23,560 | ||||||
Right-of-use assets | 1,612 | 1,799 | ||||||
Deferred tax asset | 5,459 | 5,778 | ||||||
Total non-current assets | 31,247 | 31,652 | ||||||
Current assets | ||||||||
Trade and other receivables | 6,724 | 5,506 | ||||||
Cash and cash equivalents | 17,168 | 8,225 | ||||||
Total current assets | 23,892 | 13,731 | ||||||
Total assets | 55,139 | 45,383 | ||||||
EQUITY AND LIABILITIES | ||||||||
Equity | ||||||||
Share capital | 64 | 64 | ||||||
Capital reserve | 19,979 | 19,979 | ||||||
Share option and warrants reserve | 1,462 | 296 | ||||||
Foreign exchange translation reserve | 1,328 | 2,530 | ||||||
Retained earnings | 18,254 | 11,343 | ||||||
Total equity | 41,087 | 34,212 | ||||||
Non-current liabilities | ||||||||
Borrowings | 5,944 | 5,937 | ||||||
Lease liability | 1,419 | 1,562 | ||||||
Total non-current liabilities | 7,363 | 7,499 | ||||||
Current liabilities | ||||||||
Trade and other payables | 4,821 | 2,428 | ||||||
Borrowings and accrued interest | 118 | 23 | ||||||
Lease liability | 392 | 413 | ||||||
Income tax payable | 1,358 | 808 | ||||||
Total current liabilities | 6,689 | 3,672 | ||||||
Total liabilities | 14,052 | 11,171 | ||||||
Total equity and liabilities | 55,139 | 45,383 | ||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||||||||||
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Cash flow from operating activities | ||||||||||||||||
Income (loss) before tax | 3,027 | (128) | 8,159 | 4,656 | ||||||||||||
Finance expenses, net | 130 | 551 | 209 | 852 | ||||||||||||
Losses (gains) on financial instruments valuation | — | 2,839 | — | (2,160) | ||||||||||||
Adjustments for non-cash items: | ||||||||||||||||
Depreciation and amortization | 634 | 517 | 1,216 | 1,050 | ||||||||||||
Movements in credit loss allowance | (240) | 14 | (100) | 161 | ||||||||||||
Share option charge | 245 | — | 1,063 | — | ||||||||||||
Cash flows from operating activities before changes in working capital | 3,796 | 3,793 | 10,547 | 4,559 | ||||||||||||
Changes in working capital | ||||||||||||||||
Trade and other receivables | 14 | (744) | (1,243) | (1,141) | ||||||||||||
Trade and other payables | 1,464 | 180 | 2,710 | 40 | ||||||||||||
Income tax paid | (536) | — | (536) | — | ||||||||||||
Cash flows generated by operating activities | 4,738 | 3,229 | 11,478 | 3,458 | ||||||||||||
Cash flows from investing activities | ||||||||||||||||
Acquisition of property and equipment | (188) | — | (218) | (17) | ||||||||||||
Acquisition of intangible assets | (1,428) | — | (1,741) | — | ||||||||||||
Cash flows used in investing activities | (1,616) | — | (1,959) | (17) | ||||||||||||
Cash flows from financing activities | ||||||||||||||||
Issue of ordinary shares and share warrants | — | 120 | — | 630 | ||||||||||||
Equity issue costs | — | — | — | (40) | ||||||||||||
Repayment of notes and bonds | — | — | — | (3,444) | ||||||||||||
Interest paid | — | (677) | (121) | (677) | ||||||||||||
Proceeds from issuance of finance instruments | — | 180 | — | 180 | ||||||||||||
Warrants repurchased | — | (68) | — | (129) | ||||||||||||
Principal paid on lease liability | (49) | (36) | (95) | (75) | ||||||||||||
Interest paid on lease liability | (47) | (50) | (96) | (99) | ||||||||||||
Cash flows used in financing activities | (96) | (531) | (312) | (3,654) | ||||||||||||
Net movement in cash and cash equivalents | 3,026 | 2,698 | 9,207 | (213) | ||||||||||||
Cash and cash equivalents at the beginning of the period | 14,035 | 4,162 | 8,225 | 6,992 | ||||||||||||
Net foreign exchange differences on cash and cash equivalents | 107 | 98 | (264) | 179 | ||||||||||||
Cash and cash equivalents at the end of the period | 17,168 | 6,958 | 17,168 | 6,958 | ||||||||||||
Supplemental Information
Constant Currency
Changes in our financial results include the impact of changes in foreign currency exchange rates. We provide "constant currency" analysis, as if EUR-USD exchange rate had remained constant period-over-period, to enhance the comparability of our results. When we use the term "constant currency," we adjust for the impact related to the translation of our condensed consolidated financial statements from EUR to USD by translating financial data for the three months June 31, 2020 using the same foreign currency exchange rates that we used to translate financial data for the three months ended June 30, 2021.
Constant currency metrics should not be considered in isolation or as a substitute for reported results prepared in accordance with IFRS. Refer to "Results of Operations" for Management's discussion of the constant currency impact for these periods. For foreign exchange rates used, refer to "Note 3 Significant Accounting Policies," within the Notes to the Condensed Consolidated Financial Statements.
Rounding
We have made rounding adjustments to some of the figures included in the discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that relate to our current expectations and views of future events. All statements other than statements of historical facts contained in this presentation, including statements regarding our future results of operations and financial position, industry dynamics, business strategy and plans and our objectives for future operations, are forward-looking statements. These statements represent our opinions, expectations, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. In some cases, you can identify forward-looking statements by terms such as "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "expect," "predict," "potential," "could," "will," "would," "ongoing," "future" or the negative of these terms or other similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements involve known and unknown risks, uncertainties, contingencies, changes in circumstances that are difficult to predict and other important factors that may cause our actual results, performance or achievements to be materially and/or significantly different from any future results, performance or achievements expressed or implied by the forward-looking statement. Such risks include our ability to manage expansion into the U.S. markets and other markets; compete in our industry; our expectations regarding our financial performance, including our revenue, costs, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow; the sufficiency of our cash, cash equivalents, and investments to meet our liquidity needs; mitigate and address unanticipated performance problems on our websites, or platforms; attract, retain, and maintain good relations with our customers; anticipate market needs or develop new or enhanced offerings and services to meet those needs; stay in compliance with laws and regulations, including tax laws, that currently apply or may become applicable to our business both in the U.S. and internationally and our expectations regarding various laws and restrictions that relate to our business; anticipate the effects of existing and developing laws and regulations, including with respect to taxation, and privacy and data protection that relate to our business; obtain and maintain licenses or approvals with gambling authorities in the U.S.; effectively manage our growth and maintain our corporate culture; identify, recruit, and retain skilled personnel, including key members of senior management; our ability to successfully identify, manage, consummate and integrate any existing and potential acquisitions; our ability to maintain, protect, and enhance our intellectual property; our intended use of the net proceeds from this offering; our ability to manage the increased expenses associated and compliance demands with being a public company; our ability to maintain our foreign private issuer status; and other important risk factors discussed under the caption "Risk Factors" in Gambling.com Group's prospectus pursuant to Rule 424(b) filed with the US Securities and Exchange Commission ("SEC") on July 23, 2021, and Gambling.com Group's other filings with the SEC as such factors may be updated from time to time. Any forward-looking statements contained in this press release speak only as of the date herof and accordingly undue reliance should not be placed on such statements. Gambling.com Group disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.
Non-IFRS Financial Measures
Management uses several financial measures, both IFRS and non-IFRS financial measures in analyzing and assessing the overall performance of the business and for making operational decisions.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
EBITDA is a non-IFRS financial measure defined as earnings excluding net finance costs, income tax charge, depreciation, and amortization. Adjusted EBITDA is a non-IFRS financial measure defined as EBITDA adjusted to exclude the effect of non-recurring items, significant non-cash items, share-based payment expense and other items that our board of directors believes do not reflect the underlying performance of the business. Adjusted EBITDA Margin is a non-IFRS measure defined as Adjusted EBITDA as a percentage of revenue.
We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful to our management as a measure of comparative operating performance from period to period as they remove the effect of items not directly resulting from our core operations including effects that are generated by differences in capital structure, depreciation, tax effects and non-recurring events.
While we use EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as tools to enhance our understanding of certain aspects of our financial performance, we do not believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are substitutes for, or superior to, the information provided by IFRS results. As such, the presentation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with IFRS. The primary limitations associated with the use of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as compared to IFRS results are that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as we define them may not be comparable to similarly titled measures used by other companies in our industry and that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin may exclude financial information that some investors may consider important in evaluating our performance.
Below is a reconciliation to EBITDA and Adjusted EBITDA from net income (loss) for the period attributable to the equity holders as presented in the Condensed Consolidated Statements of Comprehensive Income and (Loss) for the period specified:
THREE MONTHS ENDED JUNE 30, | CHANGE | SIX MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||||||||||||||||
2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||||||||||||||||||
(in thousands USD, | (in thousands USD, | |||||||||||||||||||||||||||||||
Net income (loss) for the period attributable to the equity holders | $ | 2,445 | $ | (428) | 2,873 | n/m | $ | 6,911 | $ | 4,305 | 2,606 | 60.5 | % | |||||||||||||||||||
Add Back: | ||||||||||||||||||||||||||||||||
Net finance costs (1) | 130 | 3,390 | (3,260) | n/m | 209 | (1,308) | 1,517 | n/m | ||||||||||||||||||||||||
Income tax charge | 582 | 300 | 282 | 94.0 | % | 1,248 | 351 | 897 | n/m | |||||||||||||||||||||||
Depreciation expense | 47 | 30 | 17 | 56.7 | % | 82 | 59 | 23 | 39.0 | % | ||||||||||||||||||||||
Amortization expense | 587 | 487 | 100 | 20.5 | % | 1,134 | 991 | 143 | 14.4 | % | ||||||||||||||||||||||
EBITDA | $ | 3,791 | $ | 3,779 | 12 | 0.3 | % | $ | 9,584 | $ | 4,398 | 5,186 | n/m | |||||||||||||||||||
Share-based payments | 245 | — | 245 | 100.0 | % | 1,063 | — | 1,063 | 100.0 | % | ||||||||||||||||||||||
Non-recurring accounting and legal fees related to the offering | 392 | — | 392 | 100.0 | % | 898 | — | 898 | 100.0 | % | ||||||||||||||||||||||
Non-recurring employees' bonuses related to the offering | 1,090 | — | 1,090 | 100.0 | % | 1,090 | — | 1,090 | 100.0 | % | ||||||||||||||||||||||
Adjusted EBITDA | $ | 5,518 | $ | 3,779 | 1,739 | 46.0 | % | $ | 12,635 | $ | 4,548 | 8,087 | n/m | |||||||||||||||||||
(1) | Net finance costs is comprised of gains/losses on financial liability at fair value through profit or loss, finance income, and finance expense. |
n/m = not meaningful |
Below is the Adjusted EBITDA Margin calculation for the period specified:
THREE MONTHS ENDED JUNE 30, | CHANGE | SIX MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||||||||||||||||
2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||||||||||||||||||
(in thousands USD, unaudited) | (in thousands USD, unaudited) | |||||||||||||||||||||||||||||||
Revenue | $ | 10,392 | $ | 6,259 | 4,133 | 66.0 | % | $ | 21,909 | $ | 10,370 | 11,539 | 111.3 | % | ||||||||||||||||||
Adjusted EBITDA | $ | 5,518 | $ | 3,779 | 1,739 | 46.0 | % | $ | 12,635 | $ | 4,548 | 8,087 | 177.8 | % | ||||||||||||||||||
Adjusted EBITDA Margin | 53.1 | % | 60.4 | % | n/m | n/m | 57.7 | % | 43.9 | % | n/m | n/m | ||||||||||||||||||||
n/m = not meaningful |
Free Cash Flow
Free Cash Flow is a non-IFRS financial measure defined as cash flow from operating activities less capital expenditures, or CAPEX.
We believe Free Cash Flow is useful to our management as a measure of financial performance as it measures our ability to generate additional cash from our operations. While we use Free Cash Flow as a tool to enhance our understanding of certain aspects of our financial performance, we do not believe that Free Cash Flow is a substitute for, or superior to, the information provided by IFRS metrics. As such, the presentation of Free Cash Flow is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with IFRS.
The primary limitation associated with the use of Free Cash Flow as compared to IFRS metrics is that Free Cash Flow does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. Free Cash Flow as we define it also may not be comparable to similarly titled measures used by other companies in the online gambling affiliate industry.
Below is a reconciliation to Free Cash Flow from cash flows generated by operating activities as presented in the Condensed Consolidated Statement of Cash Flows for the period specified:
THREE MONTHS ENDED JUNE 30, | CHANGE | SIX MONTHS ENDED JUNE 30, | CHANGE | |||||||||||||||||||||||||||
2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||||||||||||||||
(in thousands USD, unaudited) | (in thousands USD, unaudited) | |||||||||||||||||||||||||||||
Cash flows generated by operating activities | $ | 4,738 | $ | 3,229 | 1,509 | 46.7 | % | $ | 11,478 | $ | 3,458 | 8,020 | n/m | |||||||||||||||||
Capital Expenditures | (1,616) | — | (1,616) | n/m | (1,959) | (17) | (1,942) | n/m | ||||||||||||||||||||||
Free Cash Flow | $ | 3,122 | $ | 3,229 | (107) | (3.3) | % | $ | 9,519 | $ | 3,441 | 6,078 | n/m | |||||||||||||||||
n/m = not meaningful |
Earnings Per Share
Below is a reconciliation of basic and diluted earnings per share as presented in the Condensed Consolidated Statement of Income (Loss) for the period specified:
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
(in thousands USD, except for share and per share data, | ||||||||||||||||
Net income (loss) for the period attributable to the equity holders | 2,445 | (428) | 6,911 | 4,305 | ||||||||||||
Weighted-average number of ordinary shares, basic | 28,556,422 | 27,361,757 | 28,556,422 | 27,408,284 | ||||||||||||
Net income (loss) per share attributable to ordinary shareholders, basic | 0.09 | (0.02) | 0.24 | 0.16 | ||||||||||||
Net income (loss) for the period attributable to the equity holders | 2,445 | (428) | 6,911 | 4,305 | ||||||||||||
Weighted-average number of ordinary shares, diluted | 31,401,166 | 27,361,757 | 31,401,166 | 30,681,694 | ||||||||||||
Net income (loss) per share attributable to ordinary shareholders, diluted | 0.08 | (0.02) | 0.22 | 0.14 | ||||||||||||
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SOURCE Gambling.com Group
