Gambling.com Group Limited Q2 FY2025 earnings call

• Generated record second-quarter revenue and adjusted EBITDA, with revenue up 30% and adjusted EBITDA up 22% Y/Y. • Marketing business had all-time high Q2 revenue; sports data business growth accelerated, with OpticOdds at 120% Y/Y growth. • Recurring subscription revenue was 25% of total revenue despite slow season. • Embraced omnichannel approach to engage users across various platforms. • Diversified via acquisitions like RotoWire, OddsJam, OpticOdds, and Spotlight.Vegas. • Spotlight.Vegas acquisition expands client base and monetization opportunities. • Confident in AI integration for search, leveraging authority, trust, and expertise.

The marketing business generated Q2 revenue with growth, while the sports data services business saw acceleration. Revenue rose 30% year-over-year, with adjusted EBITDA increasing 22%. Recurring subscription revenue accounted for 25% of total revenue. The sports data services business, led by OpticOdds with 120% year-on-year growth, contributed to the growth. The marketing business had all-time highs for Q2 revenue, and the sports data business's growth accelerated.

• Adjusted full-year revenue range to $171M-$175M and adjusted EBITDA range to $62M-$64M. • Impacted by Google algorithm update, but expects to recover lost search rankings. • Spotlight.Vegas contribution and Missouri sports betting launch affect guidance. • Expect Spotlight.Vegas to generate net revenue of at least $8M and incremental adjusted EBITDA of at least $1.4M in 2026.

• Risks related to Google algorithm changes affecting search rankings. • Uncertainty in market share consolidation for traffic sourced through AI searches. • Potential impact of legal ambiguity on prediction markets in the U.S. affecting business growth.

Q: Please provide metrics underlying the earn-out compensation for the Spotlight.Vegas transaction?

A: Upfront payment of $8M, with a 2-year earn-out component capped at $22M ( $11M per year) based on incremental EBITDA above a threshold, effective multiple on earn-out is 6x operating profit.

Q: How long does it typically take to rebalance after Google algorithm changes?

A: Usually 1-3 months, and the company expects to recover lost positions by the end of the year.

Q: What are the KPIs for OpticOdds growth?

A: For OddsJam, average revenue per user is up as they upsell; for OpticOdds, new clients are signing up and average revenue per client is increasing, with a diverse client base including start-ups, professional betters, apps, and media companies