Gambling.com Group Reports Record First Quarter Results Including 36% Revenue Increase to $26.7 Million
Net Income Rises
Raises 2023 Guidance to Revenue of
First Quarter 2023 vs. First Quarter 2022 Financial Highlights
(USD in thousands, except per share data, unaudited)
|
Three Months Ended March 31, |
|
Change |
|||||
|
2023 |
|
|
2022 |
|
|
% |
|
Revenue |
26,692 |
|
|
19,585 |
|
|
36 |
% |
Net income for the period attributable to shareholders (1) |
6,595 |
|
|
4,487 |
|
|
47 |
% |
Net income per share attributable to shareholders, diluted (1) |
0.17 |
|
|
0.12 |
|
|
42 |
% |
Adjusted net income for the period attributable to shareholders (1) |
7,551 |
|
|
4,487 |
|
|
68 |
% |
Adjusted net income per share attributable to shareholders, diluted (1) |
0.20 |
|
|
0.12 |
|
|
67 |
% |
Adjusted EBITDA (1) |
10,673 |
|
|
7,186 |
|
|
49 |
% |
Adjusted EBITDA Margin (1) |
40 |
% |
|
37 |
% |
|
|
|
Cash flows generated by operating activities |
7,082 |
|
|
3,585 |
|
|
98 |
% |
Free Cash Flow (1) |
6,205 |
|
|
1,373 |
|
|
352 |
% |
(1) For the three months March 31, 2023, Adjusted net income and Adjusted net income per share exclude, and Net Income and Net Income per share include, adjustments related to our 2022 acquisitions of RotoWire and BonusFinder of |
Charles Gillespie, Chief Executive Officer and Co-Founder of Gambling.com Group commented, “Our record first quarter 2023 results exceeded internal forecasts and reflect industry-leading organic revenue growth as well as strong profitability and cash generation. Our performance in the first quarter demonstrates both Gambling.com Group’s successful execution on our North American growth initiatives and our success in generating ongoing attractive growth in more established markets. New depositing customers ("NDCs") increased
“We continue to deliver strong growth in both our newer and more established markets, with particular strength in iCasino performance marketing revenue in many of our global markets. North American revenue increased
“We have established a record of consistently delivering market-leading organic revenue growth compared to our publicly-traded peers, as well as strong Adjusted EBITDA and Free Cash Flow. The advantages of our proprietary technology are a key factor driving our consistent growth in established markets and our success in addressing the high-growth North American market opportunity. Following the strong start to the year, we are raising our outlook for 2023 full-year revenue and Adjusted EBITDA as we remain on track to deliver another year of strong profitable organic growth and record financial results.”
First Quarter 2023 and Recent Business Highlights
-
North American revenue grew
33% to$14.1 million - Delivered more than 88,000 new depositing customers
-
Successfully launched operations in
Ohio andMassachusetts -
Entered into a strategic media partnership with Gannett Co., Inc., publisher of
USA TODAY -
In April 2023, paid contingent consideration of
$20.0 million 50% was paid in ordinary shares -
Subsequent to the end of the quarter, the Company repurchased 69,128 ordinary shares at an average price of
$9.76
Elias Mark, Chief Financial Officer of Gambling.com Group, added, “Our focus on efficiency combined with operating leverage derived from revenue growth enabled us to expand Adjusted EBITDA Margin and grow Free Cash Flow
2023 Outlook
The Company today raised its full-year 2023 guidance for revenue of
- No anticipation of going live in any additional North American markets for the balance of 2023
- No benefit from any new acquisitions
- New investments throughout 2023 for the development of Casinos.com and support to our media partners, including Gannett and McClatchy
- An average EUR/USD exchange rate of 1.085 throughout 2023
Conference Call Details
Date/Time: |
Thursday, May 18, 2023, at 8:00 a.m. ET |
Webcast: |
|
|
877-407-0890 |
International Dial In: |
+1-201-389-0918 |
To access, please dial in approximately 10 minutes before the start of the call. 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. Information contained on the Company’s website is not incorporated into this press release.
About Gambling.com Group Limited
Gambling.com Group Limited (Nasdaq: GAMB) (the "Group") is a multi-award-winning performance marketing company and a leading provider of digital marketing services active in the online gambling industry. Founded in 2006, the Group has offices globally, primarily operating in
Use of Non-IFRS Measures
This press release contains certain non-IFRS financial measures, such as Adjusted Net Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and related ratios. See “Supplemental Information - 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.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the
Consolidated Statements of Comprehensive Income (Unaudited)
(USD in thousands, except per share amounts)
The following table details the consolidated statements of comprehensive income for the three months ended March 31, 2023 and 2022 in the Company's reporting currency and constant currency.
|
Reporting Currency |
|
Constant Currency |
|||||||||||
|
Three months ended
|
|
Change |
|
Three months ended
|
|
Change |
|||||||
|
2023 |
|
|
2022 |
|
|
% |
|
2022 |
|
|
% |
||
Revenue |
26,692 |
|
|
19,585 |
|
|
36 |
% |
|
19,013 |
|
|
40 |
% |
Cost of sales |
(991 |
) |
|
(1,229 |
) |
|
(19 |
) % |
|
(1,193 |
) |
|
(17 |
) % |
Gross profit |
25,701 |
|
|
18,356 |
|
|
40 |
% |
|
17,820 |
|
|
44 |
% |
Sales and marketing expenses |
(8,038 |
) |
|
(7,362 |
) |
|
9 |
% |
|
(7,147 |
) |
|
12 |
% |
Technology expenses |
(2,223 |
) |
|
(1,363 |
) |
|
63 |
% |
|
(1,323 |
) |
|
68 |
% |
General and administrative expenses |
(5,781 |
) |
|
(4,828 |
) |
|
20 |
% |
|
(4,687 |
) |
|
23 |
% |
Movements in credit losses allowance |
(649 |
) |
|
(526 |
) |
|
23 |
% |
|
(511 |
) |
|
27 |
% |
Fair value movement on contingent consideration |
(852 |
) |
|
— |
|
|
100 |
% |
|
— |
|
|
100 |
% |
Operating profit |
8,158 |
|
|
4,277 |
|
|
91 |
% |
|
4,152 |
|
|
96 |
% |
Finance income |
100 |
|
|
828 |
|
|
(88 |
) % |
|
804 |
|
|
(88 |
) % |
Finance expenses |
(563 |
) |
|
(249 |
) |
|
126 |
% |
|
(242 |
) |
|
133 |
% |
Income before tax |
7,695 |
|
|
4,856 |
|
|
58 |
% |
|
4,714 |
|
|
63 |
% |
Income tax charge |
(1,100 |
) |
|
(369 |
) |
|
198 |
% |
|
(358 |
) |
|
207 |
% |
Net income for the period attributable to shareholders |
6,595 |
|
|
4,487 |
|
|
47 |
% |
|
4,356 |
|
|
51 |
% |
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|||||
Exchange differences on translating foreign currencies |
1,368 |
|
|
(1,368 |
) |
|
(200 |
) % |
|
(1,328 |
) |
|
(203 |
) % |
Total comprehensive income for the period attributable to shareholders |
7,963 |
|
|
3,119 |
|
|
155 |
% |
|
3,028 |
|
|
163 |
% |
Consolidated Statements of Financial Position (Unaudited) |
|||||
(USD in thousands) |
|||||
|
MARCH 31,
|
|
DECEMBER 31,
|
||
ASSETS |
|
|
|
||
Non-current assets |
|
|
|
||
Property and equipment |
818 |
|
|
714 |
|
Right-of-use assets |
1,728 |
|
|
1,818 |
|
Intangible assets |
89,834 |
|
|
88,521 |
|
Deferred compensation cost |
30 |
|
|
29 |
|
Deferred tax asset |
5,793 |
|
|
5,832 |
|
Total non-current assets |
98,203 |
|
|
96,914 |
|
Current assets |
|
|
|
||
Trade and other receivables |
15,632 |
|
|
12,222 |
|
Inventories |
75 |
|
|
75 |
|
Cash and cash equivalents |
33,564 |
|
|
29,664 |
|
Total current assets |
49,271 |
|
|
41,961 |
|
Total assets |
147,474 |
|
|
138,875 |
|
EQUITY AND LIABILITIES |
|
|
|
||
Equity |
|
|
|
||
Share capital |
— |
|
|
— |
|
Capital reserve |
63,723 |
|
|
63,723 |
|
Treasury shares |
(348 |
) |
|
(348 |
) |
Share options and warrants reserve |
5,214 |
|
|
4,411 |
|
Foreign exchange translation reserve |
(5,707 |
) |
|
(7,075 |
) |
Retained earnings |
32,993 |
|
|
26,398 |
|
Total equity |
95,875 |
|
|
87,109 |
|
Non-current liabilities |
|
|
|
||
Other payables |
294 |
|
|
290 |
|
Deferred consideration |
— |
|
|
4,774 |
|
Contingent consideration |
11,836 |
|
|
11,297 |
|
Lease liability |
1,439 |
|
|
1,518 |
|
Deferred tax liability |
2,200 |
|
|
2,179 |
|
Total non-current liabilities |
15,769 |
|
|
20,058 |
|
Current liabilities |
|
|
|
||
Trade and other payables |
5,943 |
|
|
6,342 |
|
Deferred income |
2,032 |
|
|
1,692 |
|
Deferred consideration |
5,100 |
|
|
2,800 |
|
Contingent consideration |
20,162 |
|
|
19,378 |
|
Other liability |
257 |
|
|
226 |
|
Lease liability |
553 |
|
|
554 |
|
Income tax payable |
1,783 |
|
|
716 |
|
Total current liabilities |
35,830 |
|
|
31,708 |
|
Total liabilities |
51,599 |
|
|
51,766 |
|
Total equity and liabilities |
147,474 |
|
|
138,875 |
|
Consolidated Statements of Cash Flows (Unaudited) |
|||||
(USD in thousands) |
|||||
|
Three Months Ended March 31, |
||||
|
2023 |
|
|
2022 |
|
|
|
|
|
||
Cash flow from operating activities |
|
|
|
||
Income before tax |
7,695 |
|
|
4,856 |
|
Finance expenses (income), net |
463 |
|
|
(579 |
) |
Adjustments for non-cash items: |
|
|
|
||
Depreciation and amortization |
545 |
|
|
1,826 |
|
Movements in credit loss allowance |
649 |
|
|
525 |
|
Fair value movement on contingent consideration |
852 |
|
|
— |
|
Share-based payment expense |
846 |
|
|
724 |
|
Income tax reimbursed |
110 |
|
|
— |
|
Cash flows from operating activities before changes in working capital |
11,160 |
|
|
7,352 |
|
Changes in working capital |
|
|
|
||
Trade and other receivables |
(3,863 |
) |
|
(5,085 |
) |
Trade and other payables |
(215 |
) |
|
1,318 |
|
Cash flows generated by operating activities |
7,082 |
|
|
3,585 |
|
Cash flows from investing activities |
|
|
|
||
Acquisition of property and equipment |
(153 |
) |
|
(143 |
) |
Acquisition of intangible assets |
(724 |
) |
|
(2,069 |
) |
Acquisition of subsidiaries, net of cash acquired |
— |
|
|
(19,295 |
) |
Payment of deferred consideration |
(2,390 |
) |
|
— |
|
Cash flows used in investing activities |
(3,267 |
) |
|
(21,507 |
) |
Cash flows from financing activities |
|
|
|
||
Interest paid |
(110 |
) |
|
(120 |
) |
Principal paid on lease liability |
(105 |
) |
|
(86 |
) |
Interest paid on lease liability |
(47 |
) |
|
(50 |
) |
Cash flows used in financing activities |
(262 |
) |
|
(256 |
) |
Net movement in cash and cash equivalents |
3,553 |
|
|
(18,178 |
) |
Cash and cash equivalents at the beginning of the period |
29,664 |
|
|
51,047 |
|
Net foreign exchange differences on cash and cash equivalents |
347 |
|
|
199 |
|
Cash and cash equivalents at the end of the period |
33,564 |
|
|
33,068 |
|
Earnings Per Share
Below is a reconciliation of basic and diluted earnings per share as presented in the Consolidated Statement of Comprehensive Income for the period specified:
|
Three Months Ended March 31, |
|
Reporting
|
|
Constant
|
||||
|
2023 |
|
2022 |
|
% |
|
% |
||
|
(USD in thousands, unaudited) |
|
|
|
|
||||
Net income for the period attributable to shareholders |
6,595 |
|
4,487 |
|
47 |
% |
|
51 |
% |
Weighted-average number of ordinary shares, basic |
36,431,633 |
|
34,877,496 |
|
4 |
% |
|
4 |
% |
Net income per share attributable to shareholders, basic |
0.18 |
|
0.13 |
|
38 |
% |
|
50 |
% |
|
|
|
|
|
|
|
|
||
Net income for the period attributable to shareholders |
6,595 |
|
4,487 |
|
47 |
% |
|
51 |
% |
Weighted-average number of ordinary shares, diluted |
38,121,794 |
|
37,214,074 |
|
2 |
% |
|
2 |
% |
Net income per share attributable to shareholders, diluted |
0.17 |
|
0.12 |
|
42 |
% |
|
42 |
% |
Supplemental Information
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 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.
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 interest, income tax (charge) credit, 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, foreign exchange gains (losses), fair value of contingent consideration, and other items that our board of directors believes do not reflect the underlying performance of the business including acquisition related expenses, such as acquisition related costs and bonuses. Adjusted EBITDA Margin is a non-IFRS measure defined as Adjusted EBITDA as a percentage of revenue.
We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful to our management team as a measure of comparative operating performance from period to period as those measures 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 Adjusted EBITDA and Adjusted EBITDA Margin as tools to enhance our understanding of certain aspects of our financial performance, we do not believe that Adjusted EBITDA and Adjusted EBITDA Margin are substitutes for, or superior to, the information provided by IFRS results. As such, the presentation of 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 Adjusted EBITDA and Adjusted EBITDA Margin as compared to IFRS results are that 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 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, Adjusted EBITDA from net income for the period attributable to shareholders as presented in the Consolidated Statements of Comprehensive Income and for the period specified:
|
Three Months Ended March 31, |
|
Reporting
|
|
Constant
|
|||||
|
2023 |
|
2022 |
|
|
% |
|
% |
||
|
(USD in thousands, unaudited) |
|
|
|
|
|||||
Net income for the period attributable to shareholders |
6,595 |
|
4,487 |
|
|
47 |
% |
|
51 |
% |
Add back (deduct): |
|
|
|
|
|
|
|
|||
Interest expenses on borrowings and lease liability |
43 |
|
170 |
|
|
(75 |
) % |
|
(74 |
) % |
Income tax charge |
1,100 |
|
369 |
|
|
198 |
% |
|
207 |
% |
Depreciation expense |
57 |
|
43 |
|
|
33 |
% |
|
36 |
% |
Amortization expense |
488 |
|
1,783 |
|
|
(73 |
) % |
|
(72 |
) % |
EBITDA |
8,283 |
|
6,852 |
|
|
21 |
% |
|
25 |
% |
Share-based payment expense |
846 |
|
724 |
|
|
17 |
% |
|
20 |
% |
Fair value movement on contingent consideration |
852 |
|
— |
|
|
100 |
% |
|
100 |
% |
Unwinding of deferred consideration |
54 |
|
— |
|
|
100 |
% |
|
100 |
% |
Foreign currency translation losses (gains), net |
327 |
|
(776 |
) |
|
(142 |
) % |
|
(143 |
) % |
Other finance results |
39 |
|
27 |
|
|
44 |
% |
|
50 |
% |
Acquisition related costs (1) |
222 |
|
359 |
|
|
(38 |
) % |
|
(36 |
) % |
Employees' bonuses related to acquisition |
50 |
|
— |
|
|
100 |
% |
|
100 |
% |
Adjusted EBITDA |
10,673 |
|
7,186 |
|
|
49 |
% |
|
53 |
% |
(1) |
The acquisition costs are related to historical and potential business combinations of the Group. |
Below is the Adjusted EBITDA Margin calculation for the period specified stated in the Company's reporting currency and constant currency:
|
Three Months Ended March 31, |
|
Reporting
|
|
Constant
|
||||||
|
2023 |
|
|
2022 |
|
|
% |
|
% |
||
|
(USD in thousands, unaudited) |
|
|
|
|
||||||
Revenue |
26,692 |
|
|
19,585 |
|
|
36 |
% |
|
40 |
% |
Adjusted EBITDA |
10,673 |
|
|
7,186 |
|
|
49 |
% |
|
53 |
% |
Adjusted EBITDA Margin |
40 |
% |
|
37 |
% |
|
|
|
|
||
In regard to forward looking non-IFRS guidance, we are not able to reconcile the forward-looking non-IFRS Adjusted EBITDA measure to the closest corresponding IFRS measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items including, but not limited to, fair value movements, share-based payments for future awards, acquisition-related expenses and certain financing and tax items.
Adjusted Net Income and Adjusted Net Income Per Share
Adjusted net income is a non-IFRS financial measure defined as net income attributable to equity holders excluding the fair value gain or loss related to contingent consideration, unwinding of deferred consideration, and certain employee bonuses related to acquisitions. Adjusted net income per diluted share is a non-IFRS financial measure defined as adjusted net income attributable to equity holders divided by the diluted weighted average number of common shares outstanding.
We believe adjusted net income and adjusted net income per diluted share are useful to our management as a measure of comparative performance from period to period as these measures remove the effect of the fair value gain or loss related to the contingent consideration, unwinding of deferred consideration, and certain employee bonuses, all associated with our acquisitions, during the limited period where these items are incurred. We expect to incur gains or losses related to the contingent consideration and expenses related to the unwinding of deferred consideration and employee bonuses until December 2023. See Note 5 of the consolidated financial statements for the three months ended March 31, 2023 for a description of the contingent and deferred considerations associated with our acquisitions.
Below is a reconciliation to Adjusted net income attributable to equity holders and Adjusted net income per share, diluted from net income for the period attributable to the equity holders and net income per share attributed to ordinary shareholders, diluted as presented in the Consolidated Statements of Comprehensive Income (Loss) and for the period specified stated in the Company's reporting currency and constant currency:
|
Three Months Ended March 31, |
|
Reporting
|
|
Constant
|
||||
|
2023 |
|
2022 |
|
% |
|
% |
||
|
(USD in thousands,
|
|
|
|
|
||||
Net income for the period attributable to shareholders |
6,595 |
|
4,487 |
|
47 |
% |
|
51 |
% |
Fair value movement on contingent consideration(1) |
852 |
|
— |
|
100 |
% |
|
100 |
% |
Unwinding of deferred consideration (1) |
54 |
|
— |
|
100 |
% |
|
100 |
% |
Employees' bonuses related to acquisition(1) |
50 |
|
— |
|
100 |
% |
|
100 |
% |
Adjusted net income for the period attributable to shareholders |
7,551 |
|
4,487 |
|
68 |
% |
|
73 |
% |
Weighted-average number of ordinary shares, basic |
36,431,633 |
|
34,877,496 |
|
4 |
% |
|
4 |
% |
Net income per share attributable to shareholders, basic |
0.18 |
|
0.13 |
|
38 |
% |
|
50 |
% |
Effect of adjustments for fair value movements on contingent consideration, basic |
0.03 |
|
0.00 |
|
100 |
% |
|
100 |
% |
Effect of adjustments for unwinding on deferred consideration, basic |
0.00 |
|
0.00 |
|
100 |
% |
|
100 |
% |
Effect of adjustments for bonuses related to acquisition, basic |
0.00 |
|
0.00 |
|
100 |
% |
|
100 |
% |
Adjusted net income per share attributable to shareholders, basic |
0.21 |
|
0.13 |
|
62 |
% |
|
75 |
% |
Weighted-average number of ordinary shares, diluted |
38,121,794 |
|
37,214,074 |
|
2 |
% |
|
2 |
% |
Net income per share attributable to ordinary shareholders, diluted |
0.17 |
|
0.12 |
|
42 |
% |
|
42 |
% |
Adjusted net income per share attributable to shareholders, diluted |
0.20 |
|
0.12 |
|
67 |
% |
|
67 |
% |
(1) |
There is no tax impact from fair value movement on contingent consideration, unwinding of deferred consideration or employee bonuses related to acquisition. |
Free Cash Flow
Free Cash Flow is a non-IFRS liquidity financial measure defined as cash flow from operating activities less capital expenditures, or CAPEX.
We believe Free Cash Flow is useful to our management team 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 because 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 Consolidated Statement of Cash Flows for the period specified in the Company's reporting currency:
|
Three Months Ended March 31, |
|
Change |
|||||
|
2023 |
|
|
2022 |
|
|
% |
|
|
(USD in thousands, unaudited) |
|
|
|||||
Cash flows generated by operating activities |
7,082 |
|
|
3,585 |
|
|
98 |
% |
Capital Expenditures (1) |
(877 |
) |
|
(2,212 |
) |
|
60 |
% |
Free Cash Flow |
6,205 |
|
|
1,373 |
|
|
352 |
% |
(1) Capital Expenditures are defined as the acquisition of property and equipment and the acquisition of intangible assets, and excludes cash flows related to business combinations. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230518005253/en/
For further information:
Investors: Peter McGough, Gambling.com Group, investors@gdcgroup.com
Richard Land, Norberto Aja, JCIR, GAMB@jcir.com, 212-835-8500
Media: Jennifer Arapoff, Gambling.com Group, media@gdcgroup.com
Jordan Bieber, 5W Public Relations, gdc@5wpr.com
Source: Gambling.com Group Limited
