Gambling.com (US:GAMB)2024-05-16 15:09Financial Data and Key Metrics Changes - The company reported a record Q1 revenue of $29.2 million, representing a 9% year-over-year increase, with over 107,000 new depositing customers (NDCs) in Q1, up 22% compared to the previous year [47][40] - Adjusted EBITDA for Q1 2024 was $10.2 million, slightly down from $10.7 million in the same quarter last year, with an adjusted EBITDA margin of 35%, which rose 300 basis points sequentially [49][40] - The updated guidance for revenue is set between $118 million and $122 million, with adjusted EBITDA expected to be between $40 million and $44 million, indicating a year-on-year growth of 14% at the midpoint [72][40] Business Line Data and Key Metrics Changes - The company closed the acquisition of Freebets.com on April 1, 2024, but did not record contributions from these assets in Q1 [48][51] - Cost of sales increased year-over-year to $2.2 million due to successful media partnerships, but decreased sequentially as revenues from media partnerships declined from a high Q4 [75][40] Market Data and Key Metrics Changes - North American revenue, the largest market, grew by 5% year-over-year, while the UK and Ireland also rose by 5%. Other Europe saw a significant growth of 39%, and the Rest of the World grew by 29% [74][40] - The company expects the impact of media partnership revenue to dampen growth in North America and the UK due to recent Google policy changes [78][40] Company Strategy and Development Direction - The company aims to capitalize on organic growth opportunities while considering additional accretive acquisitions to expand its footprint in the online gambling ecosystem [32][40] - There is a strategic focus on revenue generation, which is more predictable, while still investing in owned assets to drive future growth [16][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the updated guidance despite headwinds from media partnerships, expecting to continue gaining market share in North America and other regions [53][40] - The company remains comfortable with the current consensus estimate for 2025 adjusted EBITDA, projecting approximately 25% year-over-year growth [46][40] Other Important Information - The company has been actively repurchasing shares, buying approximately 329,000 ordinary shares at an average price of $9.10, with a remaining authorization of approximately $3.9 million [50][40] - Cash as of March 31 totaled $25.3 million, reflecting strong operating cash flow despite share repurchases and acquisition payments [77][40] Q&A Session Summary Question: Impact of Google's new policy on media partnerships - Management acknowledged that media partnerships will not disappear but will be diminished, and they remain committed to supporting partners through these changes [108][40] Question: Pathway to $100 million EBITDA milestone - The company expects to grow organically at a lowish CAGR in the mid-teens and add scale through M&A to reach the $100 million EBITDA target in the midterm [84][40] Question: Geographical breakdown of updated revenue guidance - Management indicated that while North America and the UK may see dampened growth due to media partnership revenue changes, Other Europe and the Rest of the World are expected to continue demonstrating strong growth [118][40]