Gambling.com (US:GAMB)2024-08-15 14:29Financial Data and Key Metrics Changes - Revenue for Q2 2024 reached a record $30.5 million, reflecting an 18% year-over-year growth, while adjusted EBITDA grew 19% to $11.2 million [4][10] - Gross profit increased by 16% year-over-year to $29.1 million, with gross margins rising to 95% from 92% in the previous quarter [11] - Adjusted net income rose 13% to $7.4 million, with adjusted diluted net income per share increasing 18% to $0.20 [12] Business Line Data and Key Metrics Changes - The company delivered over 108,000 new depositing customers (NDCs), up 19% year-over-year, with significant growth in iGaming revenue across Europe [10] - Revenue in the UK and Ireland rose 18% year-over-year, while revenue from other European markets increased by 111% [10] - North American revenue was stable year-on-year when excluding a strong performance from the previous year, but overall revenue in North America decreased by 8% [10] Market Data and Key Metrics Changes - The company experienced strong iGaming growth across Europe, particularly in the UK, while North America showed resilience despite challenges [4][10] - The performance marketing channel is estimated to account for about 40% of iGaming and 30% of sports betting customers in established markets, with expectations for North America to trend similarly as the market matures [7] Company Strategy and Development Direction - The company is focused on optimizing performance in response to changes in the operating environment, particularly regarding media partnerships affected by Google's policy changes [6] - There is a strong emphasis on creating value for B2C online gambling operator clients, with expectations for continued growth in market share globally [7] - The company raised its revenue and adjusted EBITDA guidance for 2024, reflecting confidence in business performance and ongoing share repurchases [9][14] Management Comments on Operating Environment and Future Outlook - Management noted that the impact of Google's policy changes on media partnerships was less pronounced than initially expected, allowing for better-than-anticipated performance [6][20] - The company remains confident in achieving $100 million in adjusted EBITDA, driven by organic growth and potential M&A opportunities [9][43] - Management highlighted the importance of digital advertising growth and the ongoing shift towards online gambling, positioning the company favorably in the market [8] Other Important Information - The company repurchased approximately 834,000 shares at an average price of $8.17 per share, with a total of 2.3 million shares repurchased to date [13] - The guidance for 2024 includes revenue expectations between $123 million to $127 million, with adjusted EBITDA expected to be between $44 million to $47 million [14] Q&A Session Summary Question: Current customer acquisition environment in North America - Management indicated that the number of people searching for high intent keywords continues to grow, contributing to a decrease in customer acquisition costs as operators become more efficient [16][18] Question: Contribution from media partnerships - Management acknowledged that the contribution from media partnerships was higher than previously guided, indicating a positive outlook for these partnerships moving forward [19][21] Question: NDC growth in newer U.S. states versus mature markets - Management emphasized that there is significant growth potential in established markets even after initial launches, with ongoing growth expected in North America [25][26] Question: M&A pipeline and focus areas - Management remains selective in M&A opportunities, focusing on adjacent businesses that complement their existing operations [27][28] Question: Impact of Google’s antitrust ruling - Management believes that any significant changes from the ruling will take years to materialize, and current search patterns have not been notably affected [30] Question: Integration of Freebets acquisition - Management reported that the integration is progressing well, with revenue contributions exceeding expectations [31][32] Question: Growth expectations for the remainder of the year - Management expects continued growth in the UK, Ireland, and other European markets, while North America may see modest growth due to the reduced impact of media partnerships [35][36]