Kambi eyes US opportunity as revenues climb 33%
Supplier recorded above-average margins of 9.7% for Q4 on the back of favourable sporting results
Kambi has reported a 33% rise in Q4 revenues to €19m, buoyed by high sportsbook margins in the second half of the year.
Favourable Premier League outcomes in particular saw margins hit 9.7% in Q4 and led to the firm outperforming its expected average of 6.5-7%.
Operating profit for the quarter climbed 178% on the previous year to €5m with an operating margin of 26%.
Revenues for the fiscal year rose 11% to €62m although EBIT dropped 12% to €7.7m.
Kambi CEO Kristian Nylen said the Q4 results were pleasing but it was important to view operator trading margins with a long-term perspective.
“Just as we weren’t overly concerned by below average margins in the first two quarters of 2017, we are not getting carried away with the higher than average margins of recent quarters,” Nylen said.
Operator turnover was up approximately 7%, although Nylen noted it would have been dampened by heavy customer losses.
The supplier also said it is closely following movements in the US sports betting case in the US Supreme Court and depending on the result, is well placed to meet licensing demands in North America.
“While the timing of a market opening remains unclear, the size of the opportunity has prompted Kambi to begin preparations to enter as and when local laws allow” the firm noted
“A state-by-state roll-out of sports betting in the US would closely resemble the regulation seen in Europe, with each state adopting their own unique frameworks. Should this occur, Kambi feels it would be well placed to meet the varying licensing demands, as it has done in Europe.
The provider said it had recently conducted a US product assessment to identify and close product gaps for the US audience, including minor modifications to meet the expectations of the local player.
Regulus Partners said in an analyst note this morning: “Kambi has effectively exploited a need for turnkey sportsbooks in competitive jurisdictions since spin-off from Kindred.
“The combination of a large client to fund development, the growing importance of sportsbook within overall remote mix and the growing complexity of providing it, should underpin this market.”