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Record Q4 pushes Gambling.com Group to full-year growth in 2023

| By Robert Fletcher
Gambling.com Group reported a year-on-year increase in revenue, adjusted EBITDA and net profit growth in 2023, helped by a record Q4, while the business has also agreed a deal to acquire Freebets.com.
Gambling.com Group 2023

Revenue for the 12 months to 31 December 2023 hit $108.7m (£85.2m/€99.6m). This was 42.1% ahead of $76.5m at Gambling.com Group in the previous year.

Growth was consistent for the group throughout the year, with revenue rising in Q1, Q2 and Q3. This quarterly growth trend continued into Q4, during which Gambling.com Group said revenue hit a record high.

The group noted several developments in 2023 that helped drive growth. These included the launch of the Casinos.com domain, as well as a new partnership with UK media publisher The Independent.

North America growth continues 

However, analysing the year, CEO Charlies Gillespie (pictured) noted the impact of the group’s ongoing expansion in North America. He said this has helped drive growth significantly in recent years, with this set to continue in 2024 and beyond.

“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,” Gillespie said. 

“Our Q4 and full-year North American revenue increased 103% and 69%, respectively. This 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. 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.”

Widespread success for Gambling.com Group

While revenue growth will be the headline figure in 2023, this had a trickle-down impact on other figures.

First, higher revenue helped offset increased spending in all areas. Cost of sales was 203.3% higher at $9.1m, while sales and marketing expenses climbed 4.8% to $35.3m, technology costs 51.5% to $10.3m and general and administrative spend 24.6% to $24.3m.

After also accounting for lower finance income and increased financial expenses, this left a pre-tax profit of $20.1m, some 593.1% more than $2.9m in the previous year.

Gambling.com Group paid $1.9m in tax but also accounted for positive foreign currency exchange impact of $4.8m. This resulted in a net profit of $21.1m, in contrast to a $2.4m loss in 2022.

In addition, adjusted EBITDA for the year was 52.3% higher at $36.7m.

Strong end to 2023 with record Q4

As noted by Gillespie, Gambling.com Group benefitted from a positive end to 2023. Revenue in Q4 reached a record $32.5m, an increase of 52.6%.

Spending-wise, cost of sales was up, while expenses increased across sales and marketing, technology and general and administrative. However, finance costs were reduced, while the group also noted $620,000 in finance income.

As such, Gambling.com Group posted $6.2m in pre-tax profit, in contrast to a $4.7m loss in the previous year. Income tax payments totalled $159,000 while positive foreign currency exchange impact hit $5.0m.

This left a comprehensive net profit of $11.3m for Q4, up by 140.4%. In addition, adjusted EBITDA jumped 53.6% to $10.6m. 

Gambling.com Group seeks more growth with Freebets.com acquisition

With an eye on further expansion, Gambling.com Group has announced a deal to acquire Freebets.com and related assets.

The group will pay a total consideration of between $37.5m and $42.5m to purchase the business. This comprises $20.0m on closing and $10.0m six months later with between $7.5m and $12.5m due one year after completion, subject to the revenue performance in 2024.

The group will fund the acquisition with existing cash on hand, borrowings under its new credit facility and future cash flow. The deal is expected to close early next month.

Gambling.com Group anticipates the purchase to produce revenue of approximately $10.0m and incremental adjusted EBITDA of approximately $5.0m during the nine months to the end of 2024.

“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,” Gillespie said. 

“By operating the 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.”

Expectations high for 2024

Taking this into account, Gambling.com Group has issued positive guidance for its 2024 full year.

Total revenue is expected to be between $129.0m and $133.0m. The midpoint of this range would be 20.5% ahead of 2023. As for adjusted EBITDA, the forecast range is $44.0m to $48.0m, with the midpoint being 25.3% higher year-on-year.

The group says this guidance assumes no other US markets will open in 2024, nor that it will benefit from new acquisitions besides Freebets.com.

“Gambling.com Group is positioned for continued revenue, adjusted EBITDA and free cash flow growth in 2024 and beyond across all of our markets,” Gillespie said. 

“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.”

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