Net profit falls 56.8% at Gambling.com Group despite revenue rise in FY21

Revenue for the 12 months to 31 December 2021 amounted to $42.3m (£32.0m/€38.4m), up from $28.0m in the previous year.

The group said this rise was primarily due to an increase in the number of new depositing customers (NDCs), with this having increased 12.5% to 117,000, as well as the improved monetisation of NDCs that it put down to a combination of technology improvements and changes in product and market mix.

Cost per acquisition (CPA) commission drew in the most revenue, generating $18.6m for the year, more than double $9.0m in the previous year. Hybrid commission climbed by 6.1% to $15.6m, while revenue share commission was up 9.1% to $3.6m and other revenue 409.6% to $4.5m.

In terms of vertical, casino accounted for $35.6m of all revenue for the full year, with sports betting at $6.2m and other sources $503,000.

The UK and Ireland remained by far the group’s core market, with over half of all revenue – $21.4m – coming from the region. Other European revenue reached $10.8m, while North America revenue was $7.5m and rest of world revenue $2.6m.

Gambling.com Group also noted a series of major achievements throughout 2021 including its successful initial public offering (IPO) on the Nasdaq Global Market in July.

The group in December also agreed a deal to acquire US-facing fantasy sports news and advice site RotoWire.com, completing the purchase just a few weeks later.

Shortly after the year-end, the group announced the acquisition of NDC Media, publisher of BonusFinder.com in a deal worth up to €60.0m, and also went live with its services in the newly regulated New York online sports betting market.

Turning to spending and total operating expenses were up 83.9% year-on-year to $30.9m, driven by increased headcount across sales and marketing, technology and general and administrative functions, as the group said it continued to invest in growth initiatives, while it also noted higher administrative expenses associated with operating as a public company.

Operating profit was up 2.7% at $11.4m, while after including $2.6m in finance income and the impact of $1.8m in finance expenses, this left a pre-tax profit of $12.2m, up 13.0% year-on-year.

In addition, when excluding some costs, Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $18.4 million, an increase of 26.0%.

The group received $289,000 in income tax benefits, but after also including the negative impact of $4.8m in foreign exchange differences, this meant net profit for the year was $7.6m, down from $17.6m in 2020.

For the final quarter of the year, revenue for the three months through to 31 December 2021 was level at $10.3m.

However, operating costs were 64.4% higher at $9.7m, while after accounting for $1.1m in finance income and $457,00 finance expenses, pre-tax profit was $1.3m, down 62.9% year-on-year. Adjusted EBITDA was also 62.3% lower at $2.3m.

After also including the impact of $444,000 in income tax payments and $1.8m in negative foreign exchange differences, this left a net loss of $958,000, compared to a $1.7m profit in 2020.

“We grew our revenue in 2021 by 51% compared to the prior year, delivered an EBITDA margin of 43% and generated over $8.0m of free cash flow as many other industry players struggled to find a path to sustainable profitability,” Gambling.com Group co-founder and chief executive Charles Gillespie said. “As we look towards 2022, we are encouraged by the strongest start to a year we have seen in our 15-year history.

“Helped by launches in New York and Louisiana, January was our best single-month performance ever – even before consolidating financial results from our recent acquisitions. Just in January, we have seen the total addressable market in North America expand by leaps and bounds and there is a clear path to additional state launches this year, along with the impending launch of Ontario next month.”

Looking at its potential performance for 2022, the group said revenue is likely to amount to between $71.0m and $76.0m, with adjusted EBITDA in a range of $22.0m to $27.0m.

“As B2C operators in the US seek a path to sustainable profitability and evaluate their marketing spend going forward, we believe that the affiliate model is ideally positioned to provide operators with more effective, higher ROI investments where they can clearly attribute the source, profitability and lifetime value of a referred player,” continued Gillespie.

“We view this shift as greatly benefitting the value of our performance marketing revenue model, and we are confident that these tailwinds support what we expect to be another year of record performance for the group.”

Gambling.com Group chief financial officer Elias Mark added: “We entered 2022 on a strong financial footing and are off to the best start to a year in the company history led by strong growth in North America. 

“We grew total revenue profitably by 51% in 2021 and we look forward to accelerating that rate of profitable growth in 2022.”