Kambi emerges from ‘toughest challenge’ with robust Q3 results

Sports betting services provider Kambi has posted a robust set of Q3 financials this week, showing growth in revenue across all the key metrics to deliver a record quarterly performance.

The firm, which is partnered in the US with Churchill Downs Inc through its BetAmerica brand and Penn National Gaming with its Barstool Sportsbook, saw revenue grow to $33.3m versus $27.3m year-on-year. Operating profit (EBIT) for the third quarter of 2020 was $7.7m, up from $4m in 2019.

Q3 profit after tax was also ahead at $6m versus $2.7m year-on-year, while cash flow from operating and investing activities (excluding working capital movements) amounted to $8.2m versus $3m year-on-year.

Those figures helped deliver record quarterly performance with revenue up 22% year-on-year and operator turnover rising 62% driven, said the firm, by the resumption of sports culminating in a busy September calendar.

CEO Kristian Nylén, updating investors, stated: “The difference between Q2 and Q3 couldn’t have been starker and underlines the ability of the business to quickly and efficiently respond not only to the lockdown situation, but also ensuring resources were in place for when sports returned.

“It’s reassuring for our partners to experience the capability and inherent flexibility Kambi has to adapt and thrive under testing conditions and we are confident in our ability to handle any potential future impacts that may arise from the virus. It’s also been reassuring to see that, despite some heightened local restrictions, there’s been no impact on high-level sports.”

Addressing the improved trading figures, he added: “Momentum gained late in Q2 carried through to Q3, with Kambi posting record quarterly revenue of €28.1m ($33.3m). Operator turnover was also up significantly to an all-time high, rising 62% year-on-year.

“The gradual return of sports drove greater volumes throughout the period, particularly during September, which produced 43% of the operator turnover for the quarter. This positive trend has continued into the start of Q4.”

On US activities, he noted: “During the quarter, we were able to complete two important pieces of business. Firstly, we signed a new partner in Churchill Downs Incorporated (CDI), a large US multi-state company and operator of the BetAmerica sportsbook brand.

“We are already live on-property with BetAmerica in two states and will launch online in the near future. CDI has already enjoyed digital success with its TwinSpires horse race wagering business and has the ambition to turn BetAmerica into a similar success story.

“It was also another busy quarter in terms of launches, culminating in the much-anticipated launch of Penn National Gaming’s (PNG) proprietary Barstool Sportsbook app in Pennsylvania in mid-September, which has delivered promising early performance numbers. The app, 100% of which was developed in-house by PNG, is just the latest example of what’s possible when using Kambi’s empowering technology.”

On the outlook, Nylén concluded: “As we near the end of 2020, the cautious optimism of earlier in the year has been replaced with growing confidence, as we finish the year in great shape. Looking ahead, having successfully come through our toughest challenge, more exciting opportunities await us.”

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