Gambling.com Group Reports 2021 Financial Results

Full year North American revenue growth of 89% to $7.5 million, total revenue growth of 51% to $42.3 million

Very strong start to Q1, strategic US-facing assets expected to drive record financial performance in 2022

Gambling.com Group Limited (Nasdaq: GAMB) (“Gambling.com Group” or the “Company”), a leading provider of digital marketing services for the global online gambling industry, today announced its operating and financial results for the year and the fourth quarter ended December 31, 2021.

2021 Financial Highlights

  • North American revenue grew 89% to $7.5 million compared to $4.0 million for the prior year
  • Revenue of $42.3 million grew 51% compared to $28.0 million for the prior year
  • Net income of $12.5 million, or $0.37 per diluted share, compared to a net income of $15.2 million, or $0.49 per diluted share, for the prior year
  • Adjusted EBITDA of $18.4 million increased 26% compared to $14.6 million for the prior year, representing an Adjusted EBITDA margin of 43%1
  • Free cash flow of $8.4 million decreased 22% compared to $10.8 million for the prior year1

Fourth Quarter 2021 Financial Highlights

  • North American revenue grew 56% to $2.2 million compared to $1.4 million in the same period for the prior year
  • Revenue of $10.3 million remained consistent to $10.3 million in the same period for the prior year
  • Net income of $0.9 million, or $0.02 per diluted share, compared to a net income of $8.5 million, or $0.35 per diluted share, in the same period for the prior year
  • Adjusted EBITDA of $2.3 million decreased 63% compared to $6.1 million in the same period for the prior year, representing an Adjusted EBITDA margin of 22%1
  • Free cash flow of $(1.8 million) compared to $3.5 million for the prior year1

Business Highlights

  • Completed successful public listing of ordinary shares on the Nasdaq Global Market in July 2021 under the ticker symbol “GAMB”
  • Named the 2021 EGR Affiliate of the Year and 2021 SBC North America Casino Affiliate of the Year
  • Delivered 117,000 new depositing customers in 2021 compared to 104,000 in 2020
  • Launched several new U.S.- facing websites during 2021 and acquired an incredibly strong portfolio of U.S. specific domain names
  • Announced the acquisition of RotoWire.com – a leader in U.S online fantasy sports – in December 2021 to leverage RotoWire’s high-quality traffic and drive substantial incremental sports betting affiliate revenue in the U.S., the acquisition was completed on January 1, 2022
  • Announced media partnership with McClatchy in January 2022 to monetize the McClatchy portfolio of digital media assets through sports betting in 29 markets across 14 states
  • Successfully entered the New York and Louisiana markets in January 2022
  • Announced acquisition of BonusFinder.com in February 2022 to better position the Group for the upcoming market launch in Ontario and further strengthening the Group's North American presence

“We grew our revenue in 2021 by 51% compared to the prior year, delivered an EBITDA margin of 43% and generated over $8 million of free cash flow as many other industry players struggled to find a path to sustainable profitability,” said Charles Gillespie, Chief Executive Officer and Co-founder of Gambling.com Group. “As we look towards 2022, we are encouraged by the strongest start to a year we have seen in our 15-year history. Helped by launches in New York and Louisiana, January was our best-single month performance ever – even before consolidating financial results from our recent acquisitions. Just in January, we have seen the total addressable market in North America expand by leaps and bounds and there is a clear path to additional state launches this year, along with the impending launch of Ontario next month. As B2C operators in the U.S. seek a path to sustainable profitability and evaluate their marketing spend going forward, we believe that the affiliate model is ideally positioned to provide operators with more effective, higher ROI investments where they can clearly attribute the source, profitability and lifetime value of a referred player. We view this shift as greatly benefitting the value of our performance marketing revenue model, and we are confident that these tailwinds support what we expect to be another year of record performance for the Group.”

2022 Outlook

Based on currently available information, the Group estimates that, for the full year 2022:

  • Total revenue will be in the range of $71 million and $76 million; and
  • Adjusted EBITDA will be in the range $22 million and $27 million1

Elias Mark, Chief Financial Officer of Gambling.com Group, added, “Our expectation for another year of record revenue and Adjusted EBITDA is supported primarily by our premier domain portfolio and our growing presence in the U.S. achieved through continuous investments in U.S-facing assets. Organic growth in North America is complemented by our recent acquisitions of RotoWire.com and BonusFinder.com as well as our initiatives to further our leadership in the more established markets that we currently serve. As we have stated, our Adjusted EBITDA margin may deviate from target in the short-term as we strategically invest to strengthen our U.S. footprint, which is reflected in our 2022 outlook. Nonetheless, our profitability metrics remain among the very best in the industry, and our free cash flow generation more than covers our organic growth initiatives and the acquisition of domain names and other assets. We entered 2022 on strong financial footing and are off to the best start to a year in the Company history led by strong growth in North America. We grew total revenue profitably by 51% in 2021 and we look forward to accelerate that rate of profitable growth in 2022.”

2021 – 2023 Financial Targets

 

 

 

 

Total Revenue Growth

 

> Average 40%

Adjusted EBITDA Margin1

 

> Average 40%

Leverage2

 

< Net Debt to Adjusted EBITDA 2.5x3

 

1 Adjusted figures represent non-IFRS information. See “Non-IFRS Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers.

2 Leverage is defined as Net Debt as a proportion of Adjusted EBITDA.

3 Net Debt is defined as Borrowings less Cash and Cash Equivalents.

 

2021 vs. 2020 Financial Highlights

 

 

 

YEAR ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD, except for

share and per share data)

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF

COMPREHENSIVE (LOSS) INCOME DATA

 

Revenue

 

 

42,323

 

 

 

27,980

 

 

 

14,343

 

 

 

51

%

Operating expenses

 

 

(30,931

)

 

 

(16,849

)

 

 

(14,082

)

 

 

84

%

Operating profit

 

 

11,392

 

 

 

11,131

 

 

 

261

 

 

 

2

%

Income before tax

 

 

12,164

 

 

 

10,752

 

 

 

1,412

 

 

 

13

%

Net income for the period attributable to the

equity holders

 

 

12,453

 

 

 

15,151

 

 

 

(2,698

)

 

 

(18

)%

Net income per share attributable to ordinary

shareholders, basic

 

 

0.40

 

 

 

0.55

 

 

 

(0.15

)

 

 

(27

)%

Net income per share attributable to ordinary

shareholders, diluted

 

 

0.37

 

 

 

0.49

 

 

 

(0.12

)

 

 

(24

)%

 

 

YEAR ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD, except Adjusted EBITDA Margin, unaudited)

 

 

 

 

 

 

 

NON-IFRS FINANCIAL MEASURES

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

18,356

 

 

 

14,608

 

 

 

3,748

 

 

 

26

%

Adjusted EBITDA Margin

 

 

43

%

 

 

52

%

 

n/m

 

 

n/m

 

Free Cash Flow

 

 

8,423

 

 

 

10,804

 

 

 

(2,381

)

 

 

(22

)%

 

n/m = not meaningful

 

 

YEAR ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

Amount

 

 

%

 

 

 

(in thousands, unaudited)

 

 

 

 

 

 

 

OTHER SUPPLEMENTAL DATA

 

 

 

 

 

 

 

 

 

 

 

 

New Depositing Customers (1)

 

 

117

 

 

 

104

 

 

 

13

 

 

 

13

%

 
 
  1. We define New Depositing Customers, or NDCs, as unique referral of a player from our system to one of our customers that satisfied an agreed metric (typically making a deposit above a minimum threshold) with the customer, thereby triggering the right to a commission for us.

Revenue

Total revenue increased 51% to $42.3 million for the year ended December 31, 2021 compared to $28.0 million for the prior year. On a constant currency basis, revenue increased $13.4 million, or 46%. Revenue growth was organic. The increase was driven by both growth in NDCs and improved monetization of NDCs that we attribute to a combination of technology improvements and changes in product and market mix. NDCs increased 13% to 117,000 compared to 104,000 in the prior year.

Our revenue disaggregated by market is as follows:

 

 

YEAR ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD)

 

 

 

 

 

 

 

U.K. and Ireland

 

 

21,391

 

 

 

16,189

 

 

 

5,202

 

 

 

32

%

Other Europe

 

 

10,800

 

 

 

5,252

 

 

 

5,548

 

 

 

106

%

North America

 

 

7,484

 

 

 

3,959

 

 

 

3,525

 

 

 

89

%

Rest of the world

 

 

2,648

 

 

 

2,580

 

 

 

68

 

 

 

3

%

Total revenues

 

 

42,323

 

 

 

27,980

 

 

 

14,343

 

 

 

51

%

Revenue increases were primarily driven by growth in revenue from the U.K. and Ireland, Other Europe, and North America.

Our revenue disaggregated by monetization is as follows:

 

 

YEAR ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD)

 

 

 

 

 

 

 

Hybrid commission

 

 

15,616

 

 

 

14,738

 

 

 

878

 

 

 

6

%

Revenue share commission

 

 

3,596

 

 

 

3,308

 

 

 

288

 

 

 

9

%

CPA commission

 

 

18,591

 

 

 

9,047

 

 

 

9,544

 

 

 

105

%

Other revenue

 

 

4,520

 

 

 

887

 

 

 

3,633

 

 

 

410

%

Total revenues

 

 

42,323

 

 

 

27,980

 

 

 

14,343

 

 

 

51

%

Revenue increases were driven primarily by additional Cost Per Acquisition, or CPA, commission and Other revenue. The increase in Other revenue was driven by bonuses related to achieving certain operator NDC performance targets and fixed fees.

Our revenue disaggregated by product type from which it is derived is as follows:

 

 

YEAR ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD)

 

 

 

 

 

 

 

Casino

 

 

35,632

 

 

 

24,135

 

 

 

11,497

 

 

 

48

%

Sports

 

 

6,188

 

 

 

3,210

 

 

 

2,978

 

 

 

93

%

Other

 

 

503

 

 

 

635

 

 

 

(132

)

 

 

(21

)%

Total revenues

 

 

42,323

 

 

 

27,980

 

 

 

14,343

 

 

 

51

%

Revenue increases were driven by growth in revenue from casino and sports products.

Operating Expenses

 

 

YEAR ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD)

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

14,067

 

 

 

8,103

 

 

 

5,964

 

 

 

74

%

Technology expenses

 

 

3,947

 

 

 

2,503

 

 

 

1,444

 

 

 

58

%

General and administrative expenses

 

 

13,014

 

 

 

5,956

 

 

 

7,058

 

 

 

119

%

Movements in credit losses allowance and write offs

 

 

(97

)

 

 

287

 

 

 

(384

)

 

 

(134

)%

Total operating expenses

 

 

30,931

 

 

 

16,849

 

 

 

14,082

 

 

 

84

%

Total operating expenses increased by $14.1 million to $30.9 million compared to $16.8 million in the prior year. On a constant currency basis, operating expenses increased by $13.5 million, or 77%. The increase was driven primarily by increased headcount across Sales and Marketing, Technology, and General and Administrative functions as we invest in the Company's organic growth initiatives as well as increased administrative expenses associated with operating as a public company.

Sales and Marketing expenses totaled $14.1 million compared to $8.1 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount.

Technology expenses totaled $4.0 million compared to $2.5 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount partially offset by capitalized development costs.

General and Administrative expenses totaled $13.0 million compared to $6.0 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount, professional services, and insurance expenses.

Earnings

Adjusted EBITDA increased by 26% to $18.4 million compared to $14.6 million in the prior year representing an Adjusted EBITDA margin of 43%. The increase was driven primarily by increased revenue partly offset by increased operating expenses.

Operating profit remained relatively constant at $11.4 million compared to $11.1 million in 2020. Operating profit in 2021 was affected by non-recurring costs related to the public offering and future acquisitions by $2.6 million, and share based payments costs by $ 2.0 million ($0.7 million and $0.4 million, respectively, in 2020).

Net income totaled $12.5 million, or $0.37 per diluted share, compared to net income of $15.2 million, or $0.49 per diluted share, in the prior year. Net income in 2020 was positively affected by the recognition of deferred tax assets of $5.4 million and gain from bonds' redemption of $1.4 million ($1.8 million and zero, respectively, in 2021).

Free Cash-flow

Total cash generated from operations of $14.0 million increased 28% compared to $10.9 million in the prior year. The increase was driven primarily by increased adjusted EBITDA. Free cash flow totaled $8.4 million compared to $10.8 million in the prior year. The decline was the result of increased cash flow generated from operations offset by increased capital expenditures consisting primarily of the acquisition of domain names and capitalized development costs.

Balance Sheet

 

 

 

AS OF

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, USD)

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF FINANCIAL

POSITION DATA

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

51,047

 

 

 

8,225

 

 

 

42,822

 

 

 

521

%

Working capital (2)

 

 

46,714

 

 

 

10,059

 

 

 

36,655

 

 

 

364

%

Total assets

 

 

91,025

 

 

 

45,383

 

 

 

45,642

 

 

 

101

%

Total borrowings

 

 

5,944

 

 

 

5,960

 

 

 

(16

)

 

 

(0

)%

Total liabilities

 

 

11,116

 

 

 

11,171

 

 

 

(55

)

 

 

(0

)%

Total equity

 

 

79,909

 

 

 

34,212

 

 

 

45,697

 

 

 

134

%

 
  1. Working capital is defined as total current assets minus total current liabilities.

n/m = not meaningful

Cash balances as of December 31, 2021 totaled $51.0 million, an increase of $42.8 million compared to $8.2 million as of December 31, 2020. Working capital as of December 31, 2021 totaled $46.7 million, an increase of $36.6 million compared to $10.1 million as of December 31, 2020.

Total assets as of December 31, 2021 were $91.0 million compared to $45.4 million as of December 31, 2020. Total borrowings, including accrued interest, remained constant at $5.9 million as of December 31, 2021 and 2020. Total liabilities decreased slightly as of December 31, 2021 to $11.1 million compared to $11.2 million as of December 31, 2020.

Total equity as of December 31, 2021 was $79.9 million compared to $34.2 million as of December 31, 2020.

The increases in working capital, total assets, and total equity were driven primarily by the net proceeds received from the IPO and operating profit and net income generated by the Company.

Fourth Quarter 2021 vs. Fourth Quarter 2020 Financial Highlights

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD, except for

share and per share data,

unaudited)

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF

COMPREHENSIVE (LOSS) INCOME DATA

 

Revenue

 

 

10,291

 

 

 

10,267

 

 

 

24

 

 

 

0

%

Operating expenses

 

 

(9,668

)

 

 

(5,897

)

 

 

(3,771

)

 

 

64

%

Operating profit

 

 

623

 

 

 

4,370

 

 

 

(3,747

)

 

 

(86

)%

Income before tax

 

 

1,311

 

 

 

3,489

 

 

 

(2,178

)

 

 

(62

)%

Net income for the period attributable to the

equity holders

 

 

867

 

 

 

8,541

 

 

 

(7,674

)

 

 

(90

)%

Net income per share attributable to ordinary

shareholders, basic

 

 

0.03

 

 

 

0.39

 

 

 

(0.36

)

 

 

(92

)%

Net income per share attributable to ordinary

shareholders, diluted

 

 

0.02

 

 

 

0.35

 

 

 

(0.33

)

 

 

(94

)%

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD,

unaudited)

 

 

 

 

 

 

 

NON-IFRS FINANCIAL MEASURES

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

2,272

 

 

 

6,115

 

 

 

(3,843

)

 

 

(63

)%

Adjusted EBITDA Margin

 

 

22

%

 

 

60

%

 

n/m

 

 

 

(38

)%

Free Cash Flow

 

 

(1,811

)

 

 

3,533

 

 

 

(5,344

)

 

 

(151

)%

 

n/m = not meaningful

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

Amount

 

 

%

 

 

 

(in thousands, unaudited)

 

 

 

 

 

 

 

OTHER SUPPLEMENTAL DATA

 

 

 

 

 

 

 

 

 

 

 

 

New Depositing Customers (1)

 

 

28

 

 

 

35

 

 

 

(7

)

 

 

(20

)%

 
  1. We define New Depositing Customers, or NDCs, as unique referral of a player from our system to one of our customers that satisfied an agreed metric (typically making a deposit above a minimum threshold) with the customer, thereby triggering the right to a commission for us.

Revenue

Total revenue in the fourth quarter remained relatively constant at $10.3 million. On a constant currency basis, revenue remained relatively constant. NDCs decreased 20% to 28,000 compared to 35,000 in the prior year. We attribute the improved monetization of NDCs to a combination of technology improvements and changes in product and market mix.

Our revenue disaggregated by market is as follows:

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD, unaudited)

 

 

 

 

 

 

 

U.K. and Ireland

 

 

5,226

 

 

 

5,780

 

 

 

(554

)

 

 

(10

)%

Other Europe

 

 

2,260

 

 

 

2,299

 

 

 

(39

)

 

 

(2

)%

North America

 

 

2,154

 

 

 

1,383

 

 

 

771

 

 

 

56

%

Rest of the world

 

 

651

 

 

 

805

 

 

 

(154

)

 

 

(19

)%

Total revenues

 

 

10,291

 

 

 

10,267

 

 

 

24

 

 

 

0

%

Changes in revenue were driven by strong organic growth in our North American markets, offset by a decline in the U.K. and Ireland and, to a lesser extent, Other Europe and Rest of the world. U.K. and Ireland revenue was negatively affected by higher than usual volatility in organic search traffic. In the comparable period, U.K. and Ireland revenue was positively affected by increased demand coinciding with restrictive Covid-19 measures. Other Europe was negatively affected by regulatory changes in Germany implemented in July 2021 partly offset by growth in revenue from other European markets.

Our revenue disaggregated by monetization is as follows:

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD, unaudited)

 

 

 

 

 

 

 

Hybrid commission

 

 

2,935

 

 

 

5,557

 

 

 

(2,622

)

 

 

(47

)%

Revenue share commission

 

 

744

 

 

 

1,004

 

 

 

(260

)

 

 

(26

)%

CPA commission

 

 

5,202

 

 

 

3,271

 

 

 

1,931

 

 

 

59

%

Other revenue

 

 

1,410

 

 

 

435

 

 

 

975

 

 

 

224

%

Total revenues

 

 

10,291

 

 

 

10,267

 

 

 

24

 

 

 

0

%

Revenue from CPA commission and Other revenue increased whereas revenue from hybrid and revenue share commission decreased. The changes in monetization were primarily a result of changes in market mix with a higher proportion of revenue from the U.S compared to the previous year. The increase in Other revenue was driven primarily by bonuses related to achieving certain operator NDC performance targets and fixed fees.

Our revenue disaggregated by product type from which it is derived is as follows:

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD, unaudited)

 

 

 

 

 

 

 

Casino

 

 

8,466

 

 

 

8,846

 

 

 

(380

)

 

 

(4

)%

Sports

 

 

1,769

 

 

 

1,160

 

 

 

609

 

 

 

53

%

Other

 

 

56

 

 

 

261

 

 

 

(205

)

 

 

(79

)%

Total revenues

 

 

10,291

 

 

 

10,267

 

 

 

24

 

 

 

0

%

Revenue increases were driven by growth in revenue from sports products offset by a decrease in casino and other revenue.

Operating Expenses

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

CHANGE

 

 

 

2021

 

 

2020

 

 

$

 

 

%

 

 

 

(in thousands USD, unaudited)

 

 

 

 

 

 

 

Sales and marketing expenses

 

 

4,632

 

 

 

2,442

 

 

 

2,190

 

 

 

90

%

Technology expenses

 

 

1,190

 

 

 

798

 

 

 

392

 

 

 

49

%

General and administrative expenses

 

 

3,877

 

 

 

2,609

 

 

 

1,268

 

 

 

49

%

Movements in credit losses allowance and write offs

 

 

(31

)

 

 

48

 

 

 

(79

)

 

 

(165

)%

Total operating expenses

 

 

9,668

 

 

 

5,897

 

 

 

3,771

 

 

 

64

%

Total operating expenses increased by $3.8 million to $9.7 million compared to $5.9 million in the prior year. On a constant currency basis, operating expenses increased by $3.6 million, or 58%. The increase was driven primarily by headcount across Sales and Marketing, Technology, and General and Administrative functions as we invest in the Company's organic growth initiatives as well as increased administrative expenses associated with operating as a public company.

Sales and Marketing expenses totaled $4.6 million compared to $2.4 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount.

Technology expenses totaled $1.2 million compared to $0.8 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount partially offset by capitalized development costs.

General and Administrative expenses totaled $3.9 million compared to $2.6 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount, professional services, and insurance expenses.

Earnings

Adjusted EBITDA decreased by 63% to $2.3 million compared to $6.1 million in the prior year representing an Adjusted EBITDA margin of 22%. The decrease was driven by increased operating expenses.

Operating profit in the fourth quarter decreased 86% to $0.6 million compared to $4.4 million in 2020. The decrease was driven primarily by a decrease in Adjusted EBITDA and an increase in share-based payments expense.

Net income in the fourth quarter totaled $0.9 million, or $0.02 per diluted share, compared to net income of $8.5 million, or $0.35 per diluted share, in the prior year. Net income in the forth quarter 2021 was positively affected by a USD/Euro foreign currency exchange gain of $1.1 million (zero in 2020). While net income in the fourth quarter of 2020 was positively affected by the recognition of deferred tax assets of $5.4 million (deferred tax asset reduction of $0.2 million in 2021).

Conference Call Details

 

 

 

Date/Time:

 

Thursday, March 24, 2022, at 9:00 am EST

Webcast:

 

https://www.webcast-eqs.com/gamb20220324/en

U.S. Toll-Free Dial In:

 

877-407-0890

International Dial In:

 

+1-201-389-0918

To access the call, please dial in approximately ten minutes before the start of the call. An accompanying slide presentation will be available in PDF format within the “News & Events” section of the Company’s website.

An archived webcast of the conference call will also be available in the News & Events section of the Company’s website at gambling.com/corporate/investors/news-events.

About Gambling.com Group

Gambling.com Group Limited (Nasdaq: GAMB) is a multi-award-winning performance marketing company and a leading provider of digital marketing services active exclusively in the online gambling industry. Founded in 2006, the Group operates from offices in Ireland, the United States and Malta. Through its proprietary technology platform, the Group publishes a portfolio of premier branded websites including Gambling.com, Bookies.com and RotoWire.com. As of March 24, 2022, the Group owns and operates more than 50 websites in seven languages across 15 national markets covering all aspects of the online gambling industry, including iGaming and sports betting.

Cautionary Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that relate to our current expectations and views of future events. All statements other than statements of historical facts contained in this press release, including statements relating to 2022 financial performance, including the 2022 financial outlook, are all forward looking statements. These statements represent our opinions, expectations, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. In some cases, you can identify forward-looking statements by terms such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” “could,” “will,” “would,” “ongoing,” “future” or the negative of these terms or other similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements involve known and unknown risks, uncertainties, contingencies, changes in circumstances that are difficult to predict and other important factors that may cause our actual results, performance or achievements to be materially and/or significantly different from any future results, performance or achievements expressed or implied by the forward-looking statement. Important factors that could cause actual results to differ materially from our expectations are discussed under the caption “Risk Factors” in Gambling.com Group’s prospectus pursuant to Rule 424(b) filed with the US Securities and Exchange Commission (“SEC”) on July 23, 2021, and Gambling.com Group’s other filings with the SEC as such factors may be updated from time to time. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Gambling.com Group disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.

Consolidated Statements of Comprehensive Income and (Loss)

(USD in thousands, except per share amounts)

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

 

YEAR ENDED

DECEMBER 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

 

 

 

 

 

Revenue

 

 

10,291

 

 

 

10,267

 

 

 

42,323

 

 

 

27,980

 

Sales and marketing expenses

 

 

(4,632

)

 

 

(2,442

)

 

 

(14,067

)

 

 

(8,103

)

Technology expenses

 

 

(1,190

)

 

 

(798

)

 

 

(3,947

)

 

 

(2,503

)

General and administrative expenses

 

 

(3,877

)

 

 

(2,609

)

 

 

(13,014

)

 

 

(5,956

)

Movements in credit losses allowance and write offs

 

 

31

 

 

 

(48

)

 

 

97

 

 

 

(287

)

Operating profit

 

 

623

 

 

 

4,370

 

 

 

11,392

 

 

 

11,131

 

(Losses) gains on financial liability at fair value through

profit or loss

 

 

 

 

 

(393

)

 

 

 

 

 

1,417

 

Finance income

 

 

1,145

 

 

 

(25

)

 

 

2,581

 

 

 

303

 

Finance expense

 

 

(457

)

 

 

(463

)

 

 

(1,809

)

 

 

(2,099

)

Income before tax

 

 

1,311

 

 

 

3,489

 

 

 

12,164

 

 

 

10,752

 

Income tax (charge) benefit

 

 

(444

)

 

 

5,052

 

 

 

289

 

 

 

4,399

 

Net income for the period attributable to the

equity holders

 

 

867

 

 

 

8,541

 

 

 

12,453

 

 

 

15,151

 

Other comprehensive (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign currencies

 

 

(1,825

)

 

 

1,730

 

 

 

(4,812

)

 

 

2,480

 

Total comprehensive (loss) income for the period

attributable to the equity holders

 

 

(958

)

 

 

10,271

 

 

 

7,641

 

 

 

17,631

 

Net income per share attributable to ordinary

shareholders, basic

 

 

0.03

 

 

 

0.39

 

 

 

0.40

 

 

 

0.55

 

Net income per share attributable to ordinary

shareholders, diluted

 

 

0.02

 

 

 

0.35

 

 

 

0.37

 

 

 

0.49

 

Consolidated Statements of Financial Position

(USD in thousands)

 

 

DECEMBER 31,

2021

 

 

DECEMBER 31,

2020

 

ASSETS

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Property and equipment

 

 

569

 

 

 

515

 

Intangible assets

 

 

25,419

 

 

 

23,560

 

Right-of-use assets

 

 

1,465

 

 

 

1,799

 

Deferred tax asset

 

 

7,028

 

 

 

5,778

 

Total non-current assets

 

 

34,481

 

 

 

31,652

 

Current assets

 

 

 

 

 

 

Trade and other receivables

 

 

5,497

 

 

 

5,506

 

Cash and cash equivalents

 

 

51,047

 

 

 

8,225

 

Total current assets

 

 

56,544

 

 

 

13,731

 

Total assets

 

 

91,025

 

 

 

45,383

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Share capital

 

 

 

 

 

64

 

Capital reserve

 

 

55,953

 

 

 

19,979

 

Share options and warrants reserve

 

 

2,442

 

 

 

296

 

Foreign exchange translation reserve

 

 

(2,282

)

 

 

2,530

 

Retained earnings

 

 

23,796

 

 

 

11,343

 

Total equity

 

 

79,909

 

 

 

34,212

 

Non-current liabilities

 

 

 

 

 

 

Borrowings

 

 

 

 

 

5,937

 

Lease liability

 

 

1,286

 

 

 

1,562

 

Total non-current liabilities

 

 

1,286

 

 

 

7,499

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

 

3,291

 

 

 

2,428

 

Borrowings and accrued interest

 

 

5,944

 

 

 

23

 

Lease liability

 

 

393

 

 

 

413

 

Income tax payable

 

 

202

 

 

 

808

 

Total current liabilities

 

 

9,830

 

 

 

3,672

 

Total liabilities

 

 

11,116

 

 

 

11,171

 

Total equity and liabilities

 

 

91,025

 

 

 

45,383

 

Consolidated Statements of Cash Flows

(USD in thousands)

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

YEAR ENDED

DECEMBER 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

(unaudited)

 

 

 

 

Cash flow from operating activities

 

 

 

 

 

 

 

 

Income before tax

 

1,311

 

3,489

 

12,164

 

10,752

Finance (income) expenses, net

 

(688)

 

488

 

(772)

 

1,796

Losses (gains) on financial instruments valuation

 

 

393

 

 

(1,417)

Adjustments for non-cash items:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

600

 

650

 

2,401

 

2,227

Movements in credit loss allowance and write offs

 

(31)

 

48

 

(97)

 

287

Other operating loss

 

 

 

70

 

Share option charge

 

529

 

371

 

1,995

 

315

Income tax paid

 

(807)

 

(434)

 

(2,092)

 

(642)

Cash flows from operating activities before changes in

working capital

 

914

 

5,005

 

13,669

 

13,318

Changes in working capital

 

 

 

 

 

 

 

 

Trade and other receivables

 

192

 

(2,015)

 

(549)

 

(3,053)

Trade and other payables

 

70

 

603

 

877

 

629

Cash flows generated by operating activities

 

1,177

 

3,593

 

13,997

 

10,894

Cash flows from investing activities

 

 

 

 

 

 

 

 

Acquisition of property and equipment

 

(78)

 

(14)

 

(305)

 

(46)

Acquisition of intangible assets

 

(2,910)

 

(46)

 

(5,269)

 

(44)

Cash flows used in investing activities

 

(2,988)

 

(60)

 

(5,574)

 

(90)

Cash flows from financing activities

 

 

 

 

 

 

 

 

Issue of ordinary shares and share warrants

 

 

2,955

 

35,910

 

3,483

Equity issue costs

 

 

(14)

 

 

(55)

Proceeds from issuance of financial instruments

 

 

6,000

 

 

6,000

Financial instruments issuance costs

 

 

(94)

 

 

(89)

Repayment of notes and bonds

 

 

(14,397)

 

 

(17,352)

Interest paid

 

(124)

 

(997)

 

(509)

 

(1,656)

Warrants repurchased

 

 

 

 

(133)

Principal paid on lease liability

 

(66)

 

(49)

 

(225)

 

(198)

Interest paid on lease liability

 

(45)

 

(56)

 

(188)

 

(201)

Cash flows (used in) generated by financing activities

 

(235)

 

(6,652)

 

34,988

 

(10,201)

Net movement in cash and cash equivalents

 

(2,046)

 

(3,119)

 

43,411

 

603

Cash and cash equivalents at the beginning of the

period

 

53,160

 

10,851

 

8,225

 

6,992

Net foreign exchange differences on cash and cash

equivalents

 

(67)

 

493

 

(589)

 

630

Cash and cash equivalents at the end of the period

 

51,047

 

8,225

 

51,047

 

8,225

Supplemental Information

Constant Currency

Changes in our financial results include the impact of changes in foreign currency exchange rates. We provide “constant currency” analysis, as if EUR-USD exchange rate had remained constant period-over-period, to enhance the comparability of our results. When we use the term “constant currency,” we adjust for the impact related to the translation of our condensed consolidated financial statements from EUR to USD by translating financial data for the prior year using the same foreign currency exchange rates that we used to translate financial data for the current year.

Constant currency metrics should not be considered in isolation or as a substitute for reported results prepared in accordance with IFRS. Refer to “Results of Operations” for Management’s discussion of the constant currency impact for these periods. For foreign exchange rates used, refer to “Note 3 Significant Accounting Policies,” within the Notes to the Condensed Consolidated Financial Statements.

Rounding

We have made rounding adjustments to some of the figures included in the discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and the related notes thereto. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Non-IFRS Financial Measures

Management uses several financial measures, both IFRS and non-IFRS financial measures in analyzing and assessing the overall performance of the business and for making operational decisions.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

EBITDA is a non-IFRS financial measure defined as earnings excluding net finance costs, income tax charge, depreciation, and amortization. Adjusted EBITDA is a non-IFRS financial measure defined as EBITDA adjusted to exclude the effect of non-recurring items, significant non-cash items, share-based payment expense and other items that our board of directors believes do not reflect the underlying performance of the business. Adjusted EBITDA Margin is a non-IFRS measure defined as Adjusted EBITDA as a percentage of revenue.

We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful to our management as a measure of comparative operating performance from period to period as they remove the effect of items not directly resulting from our core operations including effects that are generated by differences in capital structure, depreciation, tax effects and non-recurring events.

While we use EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as tools to enhance our understanding of certain aspects of our financial performance, we do not believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are substitutes for, or superior to, the information provided by IFRS results. As such, the presentation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with IFRS. The primary limitations associated with the use of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as compared to IFRS results are that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as we define them may not be comparable to similarly titled measures used by other companies in our industry and that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin may exclude financial information that some investors may consider important in evaluating our performance.

Below is a reconciliation to EBITDA and Adjusted EBITDA from net income for the period attributable to the equity holders as presented in the Condensed Consolidated Statements of Comprehensive Income and for the period specified:

 

 

THREE MONTHS

ENDED

DECEMBER 31,

 

CHANGE

 

YEAR

ENDED

DECEMBER 31,

 

CHANGE

 

 

2021

 

2020

 

$

 

%

 

2021

 

2020

 

$

 

%

 

 

(in thousands USD,

unaudited)

 

 

 

 

 

(in thousands USD,

unaudited)

 

 

 

 

Net income for the period

attributable to the

equity holders

 

867

 

8,541

 

(7,674)

 

(90)%

 

12,453

 

15,151

 

(2,698)

 

(18)%

Add Back:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net finance (income) costs (1)

 

(688)

 

881

 

(1,569)

 

(178)%

 

(772)

 

379

 

(1,151)

 

(304)%

Income tax charge (benefit)

 

444

 

(5,052)

 

5,496

 

(109)%

 

(289)

 

(4,399)

 

4,110

 

(93)%

Depreciation expense

 

52

 

33

 

19

 

58%

 

176

 

123

 

53

 

43%

Amortization expense

 

548

 

617

 

(69)

 

(11)%

 

2,225

 

2,104

 

121

 

6%

EBITDA

 

1,223

 

5,020

 

(3,797)

 

(76)%

 

13,793

 

13,358

 

435

 

3%

Share-based payments

 

529

 

371

 

158

 

43%

 

1,995

 

371

 

1,624

 

438%

Accounting and legal fees related to the offering (2)

 

 

724

 

(724)

 

n/m

 

963

 

724

 

239

 

33%

Employees’ bonuses related to the offering (2)

 

 

 

 

n/m

 

1,085

 

 

1,085

 

n/m

Acquisition related costs (3)

 

520

 

 

520

 

n/m

 

520

 

 

520

 

n/m

Costs related to lease termination

 

 

 

 

n/m

 

 

155

 

(155)

 

n/m

Adjusted EBITDA

 

2,272

 

6,115

 

(3,843)

 

(63)%

 

18,356

 

14,608

 

3,748

 

26%

 
  1. Net finance (income) costs is comprised of gains or losses on financial liability at fair value through profit or loss, finance income, and finance expense.
  2. The accounting and legal fees and employee bonus costs related to the offering are not expected to be incurred in the future as these costs were directly related to the initial public offering.
  3. The acquisition costs are related to the future business combinations of the Group.

n/m = not meaningful

Below is the Adjusted EBITDA Margin calculation for the period specified:

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

CHANGE

 

YEAR ENDED

DECEMBER 31,

 

CHANGE

 

 

2021

 

2020

 

$

 

%

 

2021

 

2020

 

$

 

%

 

 

(in thousands USD,

unaudited)

 

 

 

 

 

(in thousands USD,

unaudited)

 

 

 

 

Revenue

 

10,291

 

10,267

 

24

 

0%

 

42,323

 

27,980

 

14,343

 

51%

Adjusted EBITDA

 

2,272

 

6,115

 

(3,843)

 

(63)%

 

18,356

 

14,608

 

3,748

 

26%

Adjusted EBITDA Margin

 

22%

 

60%

 

n/m

 

(38)%

 

43%

 

52%

 

n/m

 

(9)%

 

n/m = not meaningful

In regard to forward looking non-IFRS guidance, we are not able to reconcile the forward looking non-IFRS Adjusted EBITDA measure to the closest corresponding IFRS measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items including, but not limited to, fair value movements, share-based payments for future awards, acquisition-related expenses and certain financing and tax items.

Free Cash Flow

Free Cash Flow is a non-IFRS financial measure defined as cash flow from operating activities less capital expenditures, or CAPEX.

We believe Free Cash Flow is useful to our management as a measure of financial performance as it measures our ability to generate additional cash from our operations. While we use Free Cash Flow as a tool to enhance our understanding of certain aspects of our financial performance, we do not believe that Free Cash Flow is a substitute for, or superior to, the information provided by IFRS metrics. As such, the presentation of Free Cash Flow is not intended to be considered in isolation or as a substitute for any measure prepared in accordance with IFRS.

The primary limitation associated with the use of Free Cash Flow as compared to IFRS metrics is that Free Cash Flow does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. Free Cash Flow as we define it also may not be comparable to similarly titled measures used by other companies in the online gambling affiliate industry.

Below is a reconciliation to Free Cash Flow from cash flows generated by operating activities as presented in the Condensed Consolidated Statement of Cash Flows for the period specified:

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

CHANGE

 

YEAR ENDED

DECEMBER 31,

 

CHANGE

 

 

2021

 

2020

 

$

 

%

 

2021

 

2020

 

$

 

%

 

 

(in thousands USD,

unaudited)

 

 

 

 

 

(in thousands USD,

unaudited)

 

 

 

 

Cash flows generated by operating

activities

 

1,177

 

3,593

 

(2,416)

 

(67)%

 

13,997

 

10,894

 

3,103

 

28%

Capital Expenditures

 

(2,988)

 

(60)

 

(2,928)

 

n/m

 

(5,574)

 

(90)

 

(5,484)

 

n/m

Free Cash Flow

 

(1,811)

 

3,533

 

(5,344)

 

(151)%

 

8,423

 

10,804

 

(2,381)

 

(22)%

 

n/m = not meaningful

Earnings Per Share

Below is a reconciliation of basic and diluted earnings per share as presented in the Condensed Consolidated Statement of Income for the period specified:

 

 

THREE MONTHS ENDED

DECEMBER 31,

 

YEAR ENDED

DECEMBER 31,

 

 

2021

 

2020

 

2021

 

2020

 

 

(in thousands USD, except for share and per share data, unaudited)

Net income for the period attributable

to the equity holders

 

867

 

8,541

 

12,453

 

15,151

Weighted-average number of ordinary shares, basic

 

33,806,422

 

22,020,056

 

30,886,559

 

27,595,446

Net income per share attributable to

ordinary shareholders, basic

 

0.03

 

0.39

 

0.40

 

0.55

Net income for the period attributable

to the equity holders

 

867

 

8,541

 

12,453

 

15,151

Weighted-average number of ordinary shares, diluted

 

36,712,375

 

24,446,668

 

33,746,536

 

30,879,550

Net income per share attributable to

ordinary shareholders, diluted

 

0.02

 

0.35

 

0.37

 

0.49

 

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