Kambi Group (KAMBI) Q3 2016 earnings summary

Executive summary

• Q3 operator turnover rose 37% YoY, driving revenue growth of 15% and operating profit growth of 25%.

• Euro 2016 concluded successfully with strong operational performance; Olympic coverage spanned all sports, though turnover contribution was below 5% for the quarter.

• Strategic NLS partnership targets omnichannel sports betting for government-regulated lotteries; NagaWorld extended its contract and expanded retail terminals.

Financial highlights

• Q3 revenue was €14.8m, up 15% YoY; 9M revenue was €41.7m, up 25%.

• Q3 operating profit was €3.1m, up from €2.5m, with a 21% margin; 9M operating profit was €7.0m versus €4.1m, at a 17% margin.

• Q3 profit after tax was €2.7m versus €2.1m a year earlier; operating expenses were €11.7m.

• Cash flow excluding working-capital movements was €1.6m in Q3 and €3.1m for 9M.

Outlook and guidance

• R. Franco was expected to launch on the Wanabet brand with the service soon; new customer signings were expected to offset Luckia's departure.

• South American operator activity increased in the prior six months; operators are preparing to launch when regulation opens.

• Investment focus: IT development across automation, front end and retail, plus more traders to support additional live events.

• Q4 trading indications were not given; Q4 2016 results were scheduled for February 14.