Gambling.com Group Limited, a leading provider of digital marketing services active exclusively in the global online gambling industry, today announced its operating and financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Financial Highlights

  • Revenue of $10.1 million grew 37% compared to $7.4 million in the same period for the prior year
  • Net income of $4.7 million, or $0.13 per diluted share, compared to a net income of $2.3 million, or $0.08 per diluted share, in the same period for the prior year
  • Adjusted EBITDA of $3.5 million decreased 14% compared to $4.0 million in the same period for the prior year, representing an Adjusted EBITDA margin of 34%1
  • Free cash flow of $0.8 million decreased 81% compared to $3.9 million in the same period for the prior year2

Third Quarter 2021 Business Highlights

  • Completed successful public listing of common shares on the Nasdaq Global Market under the ticker symbol “GAMB”
  • Announced appointment of Mr. Daniel D’Arrigo to Board of Directors
  • Received temporary supplier license from the Arizona Department of Gaming to provide marketing services to licensed operators in the state and launched free-to-use comparison of legal online sports betting services on BetArizona.com
  • Launches of Marylandbets.com, casinosource.nl and gambling.com/nl providing bettors in Maryland and the Netherlands with trusted and up to date gambling information to help them place safe and secure legal wagers
  • Completed acquisition of domains suitable for targeting the US market

“Our financial performance in the third quarter remained strong as we grew revenue by 37% compared to the prior year and, despite the third quarter being the seasonally slowest quarter of the year, delivered an Adjusted EBITDA margin of 34%,” said Charles Gillespie, Chief Executive Officer and co-founder of Gambling.com Group. “Importantly, after the quiet summer months of July and August, we delivered all-time-high revenue in September. With the launch of Arizona and the kickoff of the NFL season, we saw a significant uplift in U.S. revenue in September and our U.S. performance exceeded our internal expectations. Entering the quarter with good momentum we are encouraged by the start to our seasonally stronger fourth quarter. We remain highly focused on prudently growing the Company through both sustained organic growth and future accretive acquisitions which we continue to actively pursue”

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 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.

Third Quarter 2021 vs. Third Quarter 2020 Financial Highlights

THREE MONTHS ENDED
SEPTEMBER 30,

CHANGE

2021

2020

$

%

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

CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME DATA

Revenue

$

10,123

$

7,406

$

2,717

37

%

Operating expenses

(7,722

)

$

(3,931

)

$

(3,791

)

96

%

Operating profit

2,401

3,475

(1,074

)

(31

)%

Income before tax

2,694

2,609

85

3

%

Net income for the period attributable to the
equity holders

$

4,675

$

2,303

$

2,372

103

%

Net income per share attributable to ordinary
shareholders, basic

0.14

0.08

0.06

75

%

Net income per share attributable to ordinary
shareholders, diluted

0.13

0.08

0.05

63

%

n/m = not meaningful

THREE MONTHS ENDED
SEPTEMBER 30,

CHANGE

2021

2020

$

%

(in thousands USD, unaudited)

NON-IFRS FINANCIAL MEASURES

Adjusted EBITDA

$

3,464

$

4,027

$

(563

)

(14

)%

Adjusted EBITDA Margin

34

%

54

%

n/m

n/m

Free Cash Flow

754

3,917

(3,163

)

(81

)%

n/m = not meaningful

THREE MONTHS ENDED
SEPTEMBER 30,

CHANGE

2021

2020

Amount

%

(in thousands, unaudited)

OTHER SUPPLEMENTAL DATA

New Depositing Customers (1)

27

28

(1

)

(4

)%

(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.

AS OF
SEPTEMBER 30,

AS OF
DECEMBER 31,

CHANGE

2021

2020

$

%

(Unaudited)

(in thousands, USD)

CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION DATA

Cash and cash equivalents

$53,160

$8,225

$44,935

n/m

Working capital (2)

55,064

10,059

45,005

n/m

Total assets

91,648

45,383

46,265

n/m

Total borrowings

5,919

5,960

(41)

n/m

Total liabilities

11,373

11,171

202

n/m

Total equity

80,275

34,212

46,063

n/m

(2)      Working capital is defined as total current assets minus total current liabilities.

n/m = not meaningful

Revenue

Total revenue in the third quarter increased 37% to $10.1 million compared to $7.4 million in the comparable period for the prior year. On a constant currency basis, revenue increased $2.3 million, or 30%. The increase was driven by improved monetization of NDCs that we attribute to a combination of technology improvements and changes in product and market mix. NDCs decreased 4% to 27,000 compared to 28,000 in the prior year.

Our revenue disaggregated by market is as follows:

THREE MONTHS ENDED
SEPTEMBER 30,

CHANGE

2021

2020

$

%

(in thousands USD, unaudited)

U.K. and Ireland

$

4,483

$

4,311

$

172

4

%

Other Europe

2,718

1,162

1,556

134

%

North America

2,270

1,081

1,189

110

%

Rest of the world

652

852

(200

)

(23

)%

Total revenues

$

10,123

$

7,406

$

2,717

37

%

Revenue increases were primarily driven by organic growth in our Other Europe and North American markets.

Our revenue disaggregated by monetization is as follows:

THREE MONTHS ENDED
SEPTEMBER 30,

CHANGE

2021

2020

$

%

(in thousands USD, unaudited)

Hybrid commission

$

2,808

$

3,847

$

(1,039

)

(27

)%

Revenue share commission

829

794

35

4

%

CPA commission

5,455

2,535

2,920

115

%

Other revenue

1,031

230

801

348

%

Total revenues

$

10,123

$

7,406

$

2,717

37

%

Revenue increases were driven primarily by additional CPA commission and Other revenue. The increase in Other revenue was driven primarily by bonuses related to achieving certain operator NDC performance targets.

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

THREE MONTHS ENDED
SEPTEMBER 30,

CHANGE

2021

2020

$

%

(in thousands USD, unaudited)

Casino

$

7,965

$

6,354

$

1,611

25

%

Sports

2,076

858

1,218

142

%

Other

82

194

(112

)

(58

)%

Total revenues

$

10,123

$

7,406

$

2,717

37

%

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

Operating Expenses

THREE MONTHS ENDED
SEPTEMBER 30,

CHANGE

2021

2020

$

%

(in thousands USD, unaudited)

Sales and marketing expenses

$

3,587

$

1,790

$

1,797

100

%

Technology expenses

1,123

663

460

69

%

General and administrative expenses

2,978

1,402

1,576

112

%

Allowance for credit losses and write offs

34

76

(42

)

(55

)%

Total operating expenses

$

7,722

$

3,931

$

3,791

96

%

n/m = not meaningful

Total operating expenses increased by $3.8 million to $7.7 million compared to $3.9 million in the prior year. On a constant currency basis, operating expenses increased by $3.5 million to $7.7 million compared to $4.2 million in the prior year. 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 $3.6 million compared to $1.8 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount and professional services.

Technology expenses totaled $1.1 million compared to $0.7 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 $3.0 million compared to $1.4 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 14% to $3.5 million compared to $4.0 million in the prior year representing an Adjusted EBITDA margin of 34%. The decrease was driven primarily by increased operating expenses partly offset by increased revenue.

Operating profit in the third quarter decreased 31% to $2.4 million compared to $3.5 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 third quarter totaled $4.7 million, or $0.13 per diluted share, compared to net income of $2.3 million, or $0.08 per diluted share, in the prior year. The increase was primarily driven by the recognition of deferred tax assets related to the transferred intangible assets.

Free Cash-flow

Total cash generated from operations of $1.4 million decreased 65% compared to $4.0 million in the prior year. The decrease was driven primarily by decreased adjusted EBITDA, the settlement of non-recurring IPO-related expenses and income tax payments. Free cash flow totaled $0.8 million compared to $3.9 million in the prior year. The decline was the result of decreased cash flow generated from operations and increased capital expenditures consisting primarily of the acquisition of domain names and capitalized development costs.

Balance Sheet

Cash balances as of September 30, 2021 totaled $53.2 million, an increase of $45.0 million compared to $8.2 million as of December 31, 2020. Working capital as of September 30, 2021 totaled $55.1 million, an increase of $45.0 million compared to $10.1 million as of December 31, 2020.

Total assets as of September 30, 2021 were $91.6 million compared to $45.4 million as of December 30, 2020. Total borrowings, including accrued interest, totaled $5.9 million compared to $6.0 million as of December 31, 2020. Total liabilities were $11.4 million compared to $11.2 million as of December 31, 2020.

Total equity as of September 30, 2021 was $80.3 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.

2021 – 2023 Financial Targets

Total Revenue Growth

> Average 40%

Adjusted EBITDA Margin3

> Average 40%

Leverage4

< Net Debt to Adjusted EBITDA 2.5x5

2021 Outlook

Elias Mark, Chief Financial Officer of Gambling.com Group, added, “Our third quarter results came in a bit above our expectations and after slow summer trading our financial performance accelerated in September to close out the quarter with the best month in the Company’s history. Our Adjusted EBITDA margin of 34% in the quarter was healthy despite a seasonally slow quarter and investments in scaling the organization for organic growth initiatives and operating as a public company. This is consistent with our prior guidance that our near-term margins may deviate from our average 40% target as we invest in our organic growth plan and pursue our M&A strategy. For the full year, we are reiterating our expectation to achieve both above 40% year-on-year organic revenue growth and approximately 40% Adjusted EBITDA margin. We remain in a very strong financial position after the IPO last quarter which offers us significant optionality going forward to execute our growth plan and each of our capital allocation priorities.”

Conference Call Details

Date/Time:

Thursday, November 18, 2021, at 9:00 am EST

Webcast:

https://www.webcast-eqs.com/gamb20211118/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.