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Revenue: $30.5 million, an 18% year-over-year increase.
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Adjusted EBITDA: $11.2 million, a 19% year-over-year increase.
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Gross Profit: $29.1 million, a 16% year-over-year increase.
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Gross Margin: Increased to 95% from 92% in the first quarter.
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Total Operating Expenses: Declined 15% to $20.8 million.
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Adjusted Net Income: $7.4 million, a 13% year-over-year increase.
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Adjusted Diluted Net Income Per Share: $0.20, an 18% increase from the previous year.
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Operating Cash Flow: $0.2 million, excluding a $7.2 million payment, would have been $7.4 million.
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Free Cash Flow: $6 million, compared to $8.7 million in the previous year.
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Share Repurchases: Approximately 834,000 shares at an average price of $8.17 per share.
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Total Cash: $7.5 million as of June 30.
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Credit Facility: $18 million drawn on a $50 million facility.
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2024 Revenue Guidance: Raised to $123 million to $127 million, with a midpoint growth of 15% year-over-year.
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2024 Adjusted EBITDA Guidance: Raised to $44 million to $47 million, with a midpoint growth of 24% year-over-year.
Release Date: August 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Gambling.com Group Ltd (NASDAQ:GAMB) reported a record Q2 revenue of $30.5 million, marking an 18% year-over-year increase.
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Adjusted EBITDA grew by 19% to $11.2 million, demonstrating strong financial performance.
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The company raised its full-year revenue guidance, reflecting confidence in continued growth.
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GAMB successfully navigated changes in Google’s policy, minimizing the impact on its media partnerships.
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The company repurchased over 6% of its outstanding shares, indicating strong confidence in its business prospects.
Negative Points
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Revenue in North America was down 8% year-over-year when factoring in the previous year’s strong performance.
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Cost of sales increased by 60% year-over-year, impacting gross profit margins.
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The company’s media partnership revenues were higher than anticipated, leading to increased cost of sales.
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There is uncertainty regarding the long-term impact of Google’s policy changes on media partnerships.
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The company faces challenges in North America due to the slower pace of new state legalizations for online gambling.
Q & A Highlights
Q: Can you discuss the current customer acquisition environment in North America, particularly regarding user volume and cost per acquisition? A: Charles Gillespie, CEO, noted that operators’ approaches to affiliates remain consistent, with the primary driver being the supply of people searching for high-intent keywords. The cost per acquisition (CAC) is decreasing as operators become more efficient, focusing on channels like affiliates that offer clear attribution and ROI.
Q: How are media partnerships performing, and what impact do you expect from Google’s policy changes? A: Gillespie explained that while media partnerships have been less prominent, they still hold potential if they are the right partnerships. The company has adjusted its cost of sales guidance upwards, reflecting sustained contributions from media partnerships. Owned and operated sites have performed strongly, benefiting from improved visibility.
Q: Is there a difference in NDC growth between newer and more mature U.S. states? A: Gillespie highlighted that growth continues even after initial state launches, with mature states like New Jersey still experiencing growth. The company expects growth in North America despite slower state legalizations, driven by ongoing demand and market share gains.
Q: Can you provide an update on the M&A pipeline and any changes since Q1? A: Gillespie stated that the company remains selective in its M&A approach, with ongoing evaluations of opportunities adjacent to the online gambling affiliate business. The recent acquisition of Freebets.com is performing ahead of expectations, and the company is focused on leveraging existing skills in complementary businesses.
Q: How might the recent court ruling against Google’s search monopoly impact your business? A: Gillespie expressed that any significant changes from the ruling are likely years away, with no immediate impact expected. The company has not observed changes in consumer search patterns due to AI advancements, and traditional search remains robust.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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