Gambling.com (GAMB) Q2 Earnings call transcript Aug 15, 2024

In the latest earnings call, Gambling.com Group showcased impressive financial performance with record-breaking revenue and adjusted EBITDA, highlighting the company's international diversification and its strategic focus on addressing real-time changes in the operating environment. The call revealed several key themes and trends, shedding light on the company's position in the online gambling ecosystem and its future prospects.

Strong Q2 Performance

Gambling.com Group reported an 18% year-over-year revenue growth to $30.5 million and a 19% increase in adjusted EBITDA to $11.2 million, demonstrating the company's resilience and adaptability in the face of challenges. The international diversification of the business, particularly in Europe and North America, played a significant role in driving this growth.

Addressing Operating Environment Changes

The company's quick response to the Google policy shift, which led to a conservative guidance revision earlier in the year, was a testament to its agility and ability to optimize performance in real-time. The team's proactive approach and successful recalibration of their portfolio of owned and operated sites have mitigated the impact of the Google policy change, underscoring the company's strategic positioning.

Value Creation for B2C Operators

Gambling.com Group's role in delivering high-intent customers to online gambling operators, particularly in the performance marketing channel, has been pivotal to their growth. The company's focus on performance marketing, which has proven to be a significant source of new players for operators, positions it well in the industry. With the right assets, technology, and teams, Gambling.com Group is confident in its ability to further this growth and capitalize on the relentless digitization of the gambling and advertising worlds.

Future Outlook and Growth Opportunities

Looking ahead, Gambling.com Group's revised full-year outlook reflects a strong confidence in the business, with a new guidance of $123 million to $127 million in revenue and $44 million to $47 million in adjusted EBITDA, reflecting a 15% and 24% year-over-year growth, respectively. This optimistic outlook is backed by the company's strong first half performance, market share gains, disciplined M&A growth focus, and strategic acquisitions like Freebets.com.

Media Partnerships and Cost of Sales

The earnings call shed light on the evolving media partnership landscape, with the company acknowledging the challenges and opportunities it presents. The company's focus on being great partners to media partners and leveraging its capabilities beyond organic SEO is a strategic move to navigate this changing landscape. The $6.5 million cost of sales guidance for 2024, up from the previous $4.7 million, highlights the evolving nature of these partnerships and the company's strategic approach to managing them.

Impact of Google's Court Ruling

The recent court ruling on Google's alleged monopoly on search and its potential impact on the business was a topic of discussion. While the company acknowledged the potential implications, it also emphasized the importance of understanding that change may take time. The company's focus on organic search growth and its diversified revenue streams, including iGaming and sports betting, position it well to navigate any potential changes in the search landscape.

In conclusion, Gambling.com Group's second quarter earnings call painted a picture of a company that is well-positioned for growth, both in the short and long term. With a strong performance marketing focus, strategic acquisitions, and a proactive approach to addressing changes in the operating environment, Gambling.com Group is poised to capitalize on the opportunities in the online gambling ecosystem.