Gambling.com Group has reported a quarterly record in the fourth quarter of 2023 thanks to consistent execution, especially in North America over the past four years.
In addition, the group has entered into a definitive agreement to acquire Freebets.com and other Europe and Canada assets from XLMedia, which CEO Charles Gillespie believes will drive further growth and “create incremental shareholder value”.
Gambling.com Group quarterly record
Publishing its financials, Gambling.com has declared $32.5m in Q4 revenue a 52 per cent improvement year-over-year (Q4 2022: $21.3m), while across 2023, revenue rose by 42 per cent to $108.7m (2022: $76.5m).
Q4 net income for the period moved back into the positive from a loss the previous year, rising by 245 per cent YoY to $6.4m (Q4 2022: $4.4m loss). For the full year, net income increased by 664 per cent to $18.3m (2022: $2.4m).
Gambling.com’s adjusted EBITDA in the quarter came in at $10.6m, a 54 per cent uptick in comparison to the same period last year (Q4 2022: $6.9m) with a consistent margin of 32 per cent. Across 2023, adjusted EBITDA rose by 53 per cent to $36.7m (2022: $24.1m) with a margin of 34 per cent (2022: 31 per cent).
As of December 31, 2023, free cash flow stood at $16.2m, a 71 per cent increase in comparison to the previous year (2022: $9.5m).
“Our fourth quarter results extended our strong record of delivering high top-line growth and attractive margins,” commented Gillespie.
“With consistent execution over the years, and especially over the past four years in North America, we have established one of the strongest and highest-growth performance marketing businesses in the online gambling industry.
“Our operating momentum continued throughout 2023 and the undeniable power of our capital efficient business is on full display in our full year results which include a 42 per cent increase in revenue to $108.7m, a 53 per cent rise in adjusted EBITDA to $36.7m and 71 per cent growth in free cash flow to $16.2m.”
North America performance
Gambling.com noted that North American revenue improved by 103 per cent in Q4 to $20.3m and recorded more than 159,000 new depositing customers. Operations were supported by Kentucky’s online sports betting launch in late September.
Following the end of the reporting period, the group launched operations in North Carolina on March 11 and secured a new $50m credit facility with Wells Fargo Bank, National Association.
Gillespie noted: “Our fourth quarter and full year North American revenue increased 103 per cent and 69 per cent, respectively. Growth was driven by new state launches, strong increases in ‘same-state’ sales and our blossoming media partnership initiatives.
“We are confident in our ability to continue growing our North American market share this year and we will also benefit from the recent launch of online sports betting in our home state of North Carolina, where we are off to a strong start since the market launched on March 11.”
CFO Elias Mark added: “The strong value we create for our online gambling operator partners is evident in the 56 per cent increase in the number of NDCs we sent to them in 2023.
“Consistent with our capital efficient DNA, nearly all of our revenue growth in 2023 was organic which we again converted into free cash flow at a very high percentage. We are positioned to further our operating momentum in 2024 as the mid-points of our revenue and adjusted EBITDA outlook reflect growth of 21 per cent and 25 per cent, respectively.”
Definitive agreement with XLMedia
Gambling.com has also entered into a definitive agreement with XLMedia for its Europe and Canada assets, including Freebets.com, WhichBingo.co.uk, Nettikasinot.com and Vedonlyonti.com, together with smaller Europe and Canada sites.
The agreement has a total consideration of up to $42.5m, including a fixed sum of $37.5m plus a potential earnout of up to $5m based on revenue performance.
The fixed sum of $37.5m will be paid in cash across three instalments – $20m being payable on the completion anticipated to be April 1; $10m on the six-month anniversary of closing; and $7.5m together with any earnout consideration on the first anniversary of completion.
“This acquisition will provide us with another big brand and assets that complement our existing website portfolio in a number of our key-focus markets, enabling us to drive further growth which is both high margin and highly accretive,” said Gillespie.
“By operating these assets on our technology platform, we expect to unlock their full potential. We are confident that this latest acquisition will create incremental shareholder value in the same way we have done with previous acquisitions.”
2024 outlook
Looking ahead, Gambling.com has published its guidance for 2024, estimating revenue of $129m to $133m and adjusted EBITDA of $44m to $48m.
This guidance takes into account the launch of sports betting in North Carolina but no additional North American markets coming online in 2024, as well as no benefit from any new acquisitions apart from approximately $10m in revenue and $5m in incremental adjusted EBITDA related to the XLMedia deal.
Gillespie concluded: “Gambling.com Group is positioned for continued revenue, adjusted EBITDA and free cash flow growth in 2024 and beyond across all of our markets.
“As significant shareholders, the founders and senior management of Gambling.com Group remain fully aligned with all owners and we are steadfastly committed to enhancing shareholder value.”
