The sports betting firm, Kambi Group, has reported a decrease in both earnings and profits for the initial three months of fiscal year 2022 compared to the same period in the previous year.
The shift of DraftKings had a negative effect on Kambi’s financial performance during the first quarter.
For the period ending on March 31, 2022, the company’s income was €36.9 million (£31.2 million/$39.2 million), representing a 14.6% drop from the €43.2 million generated in the corresponding period of the previous year.
Kambi attributed the decline primarily to the strong performance in fiscal year 2021 and the implementation of new regulations in the Netherlands, which necessitated the temporary suspension of operations for certain operators prior to obtaining new licenses in the country.
When adjusted for currency fluctuations, operator turnover experienced a 31.0% year-on-year decrease. However, this was primarily attributed to the fact that DraftKings continued to utilize Kambi’s technology in the first quarter of 2020. Excluding DraftKings from the comparison period, turnover would have shown an increase of 25.5%.
In terms of geographic distribution, revenue from the Americas constituted 55% of the total revenue for the quarter, Europe accounted for 43%, and other regions contributed 2%. Kambi also highlighted that 93% of all revenue originated from regulated markets, an increase from 87% in the previous year.
Simultaneously, total operating expenditures rose by 20.4% to €29.5 million, which, in conjunction with the revenue decline, resulted in a decrease in operating profit to €7 million.
Kambis earnings for the initial three months of 2023 were 3 million euros, a decline of 61.0% from the same period a year ago.
Costs related to finance also rose by 93.2% to 286,000 euros. Consequently, profits before taxes for the quarter decreased by 61.6% to 7.1 million euros. After paying 1.6 million euros in income taxes, Kambi’s net profit was 5.4 million euros, a drop of 64.2% compared to the same period last year.
Meanwhile, earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 41.5% to 13.8 million euros.
In other developments during the quarter, Kambi successfully entered the Canadian market through a collaboration with NorthStar Gaming. This will initially focus on sports betting in Ontario, which opened its legal online gambling market on April 4th.
In February, Kambi announced an extension of its long-standing partnership with Kindred Group until 2026. They also signed a sports betting agreement with sports betting operator Carousel Group’s MaximBet brand. MaximBet has already gone live in Colorado and plans to launch in Indiana, Iowa, New Jersey, Ohio, and Pennsylvania.
During the quarter, Kambi launched a total of 11 products in the United States, including Rush Street Interactive in New York in January, Affinity Interactive in Iowa, and Parx Casino in New Jersey and Pennsylvania.
Kambi’s chief executive, Kristian Nylen, stated: “The initial three months of the year were another active period for Kambi, with new partner agreements, contract extensions, continued market expansion, and several product and technology advancements.”
After the modifications, the operator’s income surged by 25%, indicating that the firm remains in a solid financial position. This increase occurred despite comparing to robust figures from the initial quarter of 2021 and encountering temporary obstacles due to Dutch rules (which we anticipate will become less stringent shortly).
In essence, Kambi’s outlook appears promising, with significant interest in both the sports wagering and services we currently provide and those we are developing for the future. Kambi achieved 40 partners this quarter, and our network is more extensive and varied than ever before. I believe we are only beginning to witness the potential.
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