Group highlights igaming as strong Q1 contributor

Image: Shutterstock Group has highlighted icasino performance marketing revenue as a strong contributor during the first quarter of 2023 in which new records were achieved.

Reflecting on the results, CEO and Co-Founder Charles Gillespie noted that the Q1 performance demonstrates the group’s “successful execution” on North American initiatives as well as ongoing growth in more established markets.

In Q1, Group’s revenue came in at $26.7m, a 36 per cent increase year-over-year (Q1 2022: $19.6m), while gross profit rose by 40 per cent to $25.7m (2022: $18.4m).

The group’s operating profit at the end of the quarter was $8.2m, up 91 per cent YoY (2022: $4.3m), while net income attributable to shareholders rose by 47 per cent to $6.6m (2022: $4.5m), and adjusted EBITDA came in at $10.7m, a 49 per cent increase (2022: $7.2m) with a margin of 40 per cent (2022: 37 per cent).

During the quarter, revenue from North American operations rose by 33 per cent YoY to $14.1m and 88,000 new depositing customers were achieved.

Elsewhere, the group entered into a strategic media deal with USA TODAY publisher Gannett Co Inc while operations were successfully launched in the US states of Ohio and Massachusetts.

Gillespie noted: “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 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 increased 31 per cent from the prior-year period, helping drive 36 per cent year-over-year revenue growth, a 49 per cent increase in adjusted EBITDA to $10.7m and an adjusted EBITDA Margin of 40 per cent.”

The CEO highlighted the strong growth seen by Group in North America, in established markets, as well as icasino as factors towards the group’s Q1 performance.

“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,” stated Gillespie. 

“North American revenue increased 33 per cent year-over-year to $14.1m, despite the year-ago period including the blockbuster launch of sports betting in New York. 

“First quarter growth in UK and Ireland, markets where we have a longer operating history, was also impressive as we generated all-time quarterly record revenue for the fifth consecutive quarter in those markets, with revenue rising 36 per cent to $8.5m. In addition, revenue from other Europe and the rest of the world increased 51 per cent.”

As a result of a strong Q1, Group’s 2023 guidance has been improved, with an estimated revenue for the year between $95m to $99m and an adjusted EBITDA of $33m to $37m. The mid-point of these ranges reflects a YoY growth of 27 per cent and 45 per cent respectively.

The guidance also takes into account that the group doesn’t expect to go live in any additional North American markets for the rest of the year or benefit from any new acquisitions.

New investments for the development of and support to media partners, including Gannett and McClatchy, were also factored into the guidance.

CFO Elias Mark 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 352 per cent year-over-year.

“We are able to continue to invest in our near- and long-term organic growth opportunities, including the development of and our new media partnership with Gannett while simultaneously delivering impressive top-line growth, adjusted EBITDA and free cash flow growth.

“Our strong cash generation and balance sheet also provides us with the flexibility to opportunistically evaluate value-enhancing strategic transactions.”

Gillespie concluded: “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.”