Gambling.com Group still considering further acquisitions as Q3 revenue grows 94%

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Topline numbers

Gambling.com Group’s Q3 revenue grew by 94.1% year-on-year to $19.6m. Adjusted EBITDA rose 31.7% to $6.4m, giving an EBITDA margin of 33%, down from 48% in the prior-year period.

The business recorded net income of $2.3m, a reduction of 51.6% year-on-year, and generated cash flow of $5.6m and free cash flow of $4.9m.

The number of new depositing customers referred to operators by the group increased by more than 150% to over 68,000 during the quarter.

News nugget

North American revenue very nearly quadrupled year-on-year to $9.1m as Gambling.com Group continued to realise the value add of its recently acquired businesses RotoWire and BonusFinder.

The firm’s appetite for buying up new strategic assets has shown no sign of slowing down, either. 

Following the end of the quarter, the business acquired the Casinos.com domain name, where it intends to launch a new brand aimed exclusively at customers seeking casino gambling.

Speaking to analysts on the firm’s Q3 earnings call, CEO Charles Gillespie said: “We bought the Gambling.com domain name in 2011 for $2.5m, and the business behind that website now is just incredible.

“And we see an opportunity to not only do the same thing with Casinos.com, but do it faster, with all the lessons we’ve learned in the past 11 years, and do it frankly with more laser focus. Because Gambling.com covers everything – it touches anything related to gambling – poker, bingo, sports betting, casino.

“Whereas Casinos.com, it’s just casinos. And casino is the most lucrative gaming product – slots and casino games are simply where the money’s made in this industry. And by having Casinos.com, we just couldn’t we couldn’t think of a better domain name than that.”

Best quote

Gambling.com Group CEO Charles Gillespie: “Historically, we’ve been very picky with our acquisitions even in a normal market, so conversations are definitely ongoing, and we still have a preference for US or North American assets. But we don’t feel like we’re under any pressure to do the next deal, and we’re being quite cautious with how we run the business given some of the larger uncertainties out there.”

Best question

When asked by Barry Jonas of Truist Securities about Gambling.com’s outlook on M&A in the market currently, Gillespie said: “We’re still very focused on M&A, but the bars we need to hurdle to make a deal worthwhile are kind of higher than they’ve been in a while.

“The cost of capital is up, macroeconomic risks are up. Being prudent, we continue to have a lot of conversations, some of which are fairly interesting, but for us to really pull the trigger on something we’re gonna need to be extremely comfortable.

“Historically, we’ve been very picky with our acquisitions even in a normal market, so conversations are definitely ongoing, and we still have a preference for US or North American assets. But we don’t feel like we’re under any pressure to do the next deal, and we’re being quite cautious with how we run the business given some of the larger uncertainties out there.”

Current trading & forecast

Gambling.com Group reiterated previously issued earnings guidance following the release of its Q3 report.

The business expects to generate total revenue between $71m and $76m in the full-year 2022, suggesting a year-on-year growth rate of some 74% at the range’s midpoint.

Adjusted EBITDA is expected to come in between $22m and $27m, representing growth of 33% at its midpoint.

Share performance

Shares rallied by some 3.5% following the release of Gambling.com Group’s Q3 report. Shares remain down some 25.8% over the past 12 months, though this is still a better result than many gambling businesses have seen throughout 2022.

About the author

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Conor Mulheir

Conor entered the gaming industry in 2018 producing high-level live event content for audiences in London, Amsterdam and São Paulo. From 2020, he went on to report news and commission exclusive content for various gaming media brands before joining iGaming NEXT as editor in January 2022.

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