Kambi Group (KAMBI) Q4 2017 earnings summary

Executive summary

• Q4 revenue hit a record EUR 19.0m, up 33% YoY, supported by a 9.7% operator trading margin.

• New customer wins, multi-year renewals and sportsbook-platform investment supported growth and long-term revenue potential.

Financial highlights

• FY revenue was EUR 62.1m versus EUR 56.0m in FY 2016.

• Q4 operating result was EUR 5.0m versus EUR 1.8m; result after tax was EUR 3.9m versus EUR 1.2m.

• FY operating result was EUR 7.7m versus EUR 8.8m; FY result after tax was EUR 5.9m versus EUR 7.5m.

• Q4 operating expenses were EUR 14.0m versus EUR 12.5m; FY operating expenses were EUR 54.4m versus EUR 47.2m.

• Q4 net cash inflow was EUR 1.9m, closing cash was EUR 34.3m and net cash was EUR 26.9m.

Outlook and guidance

• Q1 2018 operating expenses were forecast to rise 3%-5% QoQ, partly due to annual ICE costs and salary inflation.

• FY 2018 operating-cost growth of 15% or slightly lower was considered a fair assumption, with later-quarter growth driven by recruitment, especially in IT and product development.

• Updated guidance on the long-term operator trading-margin range was expected the following quarter, after review of indications of a slightly higher level.

• SunBet's launch on the sportsbook platform was targeted for the coming months, subject to local compliance procedures.

• Preparations for potential U.S. legalization included state-by-state regulatory readiness, local product assessment and commercial strategy.