Gambling.com Group has reported a revenue uptick in the third quarter of 2023, with growth in North America being a significant contributor.
However, CEO Charles Gillespie noted that improvements in North America were offset by a “moderation” in the UK and Ireland, but the digital marketing services company is “confident” that growth in those markets will “remain strong”.
Publishing its Q3 financials, Gambling.com declared a revenue improvement of 19 per cent year-over-year to $23.5m (Q3 2022: $19.6m), which Gillespie stated was “driven by robust organic growth in North America” as well as depositing customers rising by 26 per cent to surpass 86,000.
Net income rose by 122 per cent YoY to $5m (2022: $2.3m), adjusted EBITDA declined by six per cent to $6.1m (2022: $6.4m), and free cash flow dropped by 68 per cent to $1.6m (2022: $4.9m).
Revenue from North American operations rose by 42 per cent YoY to $12.9m, but as previously mentioned, Gillespie stated this performance was offset by a decline in its UK and Ireland operations.
“Our strong North American growth was partially offset by a moderation in our UK and Ireland performance.”
Gambling.com Group CEO Charles Gillespie
During the quarter, Gambling.com launched its Casinos.com website in July, went live with its first international media partnership with The Independent in the UK during the same month, as well as launching its operations in Kentucky during September.
Gillespie commented: “Third quarter North American revenue of $12.9m includes significant growth in our owned assets and a break-out performance from our media partnerships at the start of the fall sports season.
“Our ability to quickly scale our strategic media partnerships complements the growth from our influential owned websites. This results in consistent year-over-year market share gains in existing states even as we face tougher comparisons given the significant organic growth we have already achieved.”
He continued: “Our strong North American growth was partially offset by a moderation in our UK and Ireland performance following seven consecutive quarters of average revenue growth of 28 per cent across these well-established markets.
“We are confident that our growth opportunities in the UK and Ireland markets will remain strong, including the expected benefit from the ramping up of our recently launched media partnership with The Independent for the UK market.”
Looking ahead, Gambling.com expects its 2023 revenue to fall between $100m and $104m with an organic growth of 31 per cent to 36 per cent YoY. Adjusted EBITDA for the full year is expected to be between $36m and $40m.
“Gambling.com Group is expected to continue to benefit from many near- and long-term opportunities to deliver profitable organic growth.”
Gambling.com Group CEO Charles Gillespie
CFO Elias Mark added: “Third quarter revenue exceeded expectations and adjusted EBITDA was in line with expectations, reflecting the faster-than-anticipated acceleration of our North American media partnerships.
“We are very pleased with the performance of our media partnerships and we expect them to continue to be a key contributor to revenue and cash flow growth going forward. Our year-to-date revenue growth combined with our disciplined focus on capital efficiency generated free cash flow for the first nine months of 2023 of $16.3m, already exceeding our full-year 2022 level.
“We remain on track to deliver strong full-year results as our reiterated guidance implies year-over-year revenue and adjusted EBITDA growth of more than 30 per cent and 50 per cent, respectively.”
Gillespie concluded: “Gambling.com Group is expected to continue to benefit from many near- and long-term opportunities to deliver profitable organic growth.
“These include further market share gains in existing markets, the benefit from expected future expansions of igaming and online sports betting in new markets in North America and around the world, our ability to scale and optimise our media partnerships and further growth in our more established European markets.
“We expect that our ability to leverage these revenue drivers with our business model, which generates attractive adjusted EBITDA margins and strong free cash flow conversion, will continue to increase shareholder value.”