Gambling.com Group Limited (GAMB) Earnings

Management highlights

- Product & Segment Strategy * Sports data services: OpticOdds continues to expand its enterprise customer base, with 86% of current customers now API-based (up from the business's initial focus on traditional odds screen partners). New AI integrations include an MCP integration for leading enterprise AI tools, and a recently announced partnership with Perplexity to provide odds data across Perplexity's full product suite, launching before end of Q2 2026. * Marketing business: The company is concentrating its portfolio on larger, higher-performing brands (such as Rotowire, which has shown improving search rankings) and diversifying revenue and traffic away from SEO. Near-term margins are pressured as new non-SEO channels scale, but management expects margins to gradually expand in H2 2026 and into 2027. * New platform initiative: The company's third-party audience monetization platform (built from its internal ad tech, data, and business intelligence tools) grew 3x YoY in Q1. The platform can be scaled with low operating expenses, and opens new revenue streams by enabling external partners to leverage the company's existing technology and commercial relationships. - AI Transformation & Restructuring * The company is shifting to an AI-first operating model, where AI is the foundational layer for all workflows rather than just a supporting tool for teams. Currently, 80% of new code is generated by AI, and AI enables faster innovation with smaller, nimbler teams, while human expertise retains oversight of output quality and strategic direction. * To align the organization with this new operating model, the company announced a strategic restructuring that will reduce total headcount by approximately 25%. Annualized net cost savings after accounting for higher AI usage costs are expected to be ~$13 million, with half of these savings realized in H2 2026 and full savings realized in 2027. - Leadership Transition * Co-Founder Kevin McChrystal will formally take over as Chief Executive Officer next week at the company's AGM. Outgoing CEO Charles Gillespie will remain active as Executive Chairman, leading key strategic initiatives and supporting the new CEO, and retains his position as the company's second largest shareholder with no plans to sell shares.

Guidance

- Full year 2026 guidance was updated to a revenue range of $165 million to $170 million, representing a $5 million downward revision from prior guidance driven by a faster-than-expected shift away from lower-cost SEO revenue. - Full year 2026 adjusted EBITDA guidance was set to a range of $45 million to $50 million. The downward adjustment from prior guidance reflects higher cost of sales from the faster revenue mix shift to non-SEO channels, partially offset by $6.5 million in restructuring cost savings in H2 2026. - Management expects significant sequential growth in revenue, adjusted EBITDA, and free cash flow in the second half of 2026, with margin expansion beginning in Q3 2026 as restructuring cost savings take effect.

Segment performance

Total company Q1 2026 revenue was $40.4 million, flat year-over-year. 1. Sports Data Services: Q1 revenue grew 13% YoY to $11.2 million, accounting for 28% of total revenue (the highest share in company history). For the first time, enterprise and consumer offerings contributed roughly equal revenue to this segment. The B2B OpticOdds sub-segment drove all growth, with 94% new deal growth YoY, 178% YoY growth in new international partner deals, and 24% quarter-over-quarter growth in average active partners. 2. Marketing: Q1 revenue declined 5% YoY to $29.2 million, accounting for 72% of total revenue. The decline was driven by ongoing search ranking challenges, worse-than-expected impacts from new UK and Finland regulation, and unfavorable outcomes that reduced rev share hold percentage in the quarter. Non-SEO revenue exceeded SEO revenue for the second consecutive quarter, making up over 50% of marketing segment revenue.

Risks & headwinds

- Ongoing SEO search ranking volatility continues to pressure the marketing business, particularly for larger branded sites, and the timing and magnitude of any recovery remains unpredictable. - Regulatory changes in key markets (the UK and Finland, most recently) have had a larger negative impact on revenue and customer lifetime values than initially expected, creating uncertainty for near-term marketing segment performance. - Transitioning to an AI-first operating model and cutting headcount carries the risk of reducing output quality or slowing development speed if implementation is mismanaged. - Faster-than-expected shift to non-SEO revenue has created sustained downward pressure on gross and operating margins relative to the historic SEO-heavy revenue mix.

Analyst Q&A

• Q: UK revenue has declined 30% — what market and customer behavior are you seeing, and have there been any changes post-April tax implementation? What is the performance of the U.S. marketing business? /

  A: UK trends are consistent with what was discussed in Q4: customer lifetime values are slightly down and traffic is slightly lower, but the market for operator affiliate deals remains robust. Since mid-April, the company has seen early positive movement in SEO traffic for gambling.com in the UK, the first positive shift since mid-2024, though this is too early to include in guidance. U.S. marketing revenue grew in Q1, driven by improvements at Rotowire and strong growth of the audience monetization platform, which now has 60% higher new deal counts than Q4. The company's scale and tools allow it to monetize high-value niche audiences for U.S. partners effectively.

• Q: How do you manage the risk of over-cutting headcount and compromising product or content quality as you shift to AI-first? What are the expected one-time restructuring costs? /

  A: One-time restructuring costs are expected to be approximately $2.5 million, spread out over the implementation period. The restructuring cuts across all business functions, not just development, and is designed to leverage AI automation to speed up output rather than reduce quality. Human expertise remains critical for directing AI work and reviewing output quality, and management believes the greater risk is in not moving fast enough to adopt AI rather than moving too quickly.

• Q: What is driving OpticOdds' recent partner growth, how sustainable is it, and where are new customers coming from beyond traditional sportsbooks? /

  A: Growth is driven by the core strategy of expanding into international markets and non-sportsbook customers: active international customers have grown from 15% to 28% of total active partners over the past year. New AI-native integrations with large language models (such as the upcoming Perplexity partnership) give OpticOdds exposure to the fast-growing consumer AI platform space, alongside existing new customer segments including prediction markets, traders, market makers, media companies, and professional sports teams. Management expects this growth trajectory to remain consistent going forward.

• Q: Is the company considering a name change, given Gambling.com now represents a small portion of the overall diversified business? /

  A: Management confirmed the company is actively considering a rebrand and name change, but will not make any announcement until plans are finalized. The company acknowledged that the current name no longer reflects its broader, diversified product portfolio and growth path.