Gambling.com Group Limited

Hello, everyone, and welcome to Gambling.com Group's first quarter 2023 earnings results call. I am Peter McGough, Vice President of Investor Relations. I am joined by Charles Gillespie, Chief Executive and Co-Founder, and Elias Mark, Chief Financial Officer. The call is being webcast live through the Investor Relations section of our website at gambling.com forward slash corporate forward slash investors. And a downloadable version of the presentation is available there as well. A webcast replay will be available on the website after the conclusion of this call. You may also contact investor relations support by emailing investors at gdcgroup.com. I would like to remind you that the information contained in this conference call, including any financial and related guidance to be provided, consists of forward-looking statements as defined by securities laws. These statements are based on information currently available to us and involve risks and certainties that could cause actual future results, performance, and business prospects, and opportunities to differ materially from those expressed in or implied by these statements. Some important factors that could cause such differences are discussed in the risk factors section of Gambling.com Group's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statements are made. and the company assumes no obligation to update forward-looking statements to reflect actual results. Changes in assumptions or changes in other factors affecting forward-looking information accept to the extent required by securities laws. During the call, there will also be a discussion of non-IFRS financial measures. A description of these non-IFRS financial measures is included in the press release issued earlier this morning. And reconciliations of these non-IFRS financial measures to their most directly comparable IFRS measures are included in the appendix to the presentation and the press release, both of which are available in the investor tab of our website. I'll now turn the call over to Charles. Thank you, Peter, and welcome, everyone.

Gambling.com group is off to a tremendous start in 2023, as this morning we reported another quarter of all-time record results. These record results were driven by continued outstanding execution of the key fundamentals of our business, supplemented by the launch of sports betting in Ohio and Massachusetts. With these results, we have again demonstrated that we are leading the way in terms of organic growth among our publicly traded peers. With this great start to the year, we continue to expect that 2023 will be another year of record financial performance, driven by strong organic growth and resulting in attractive levels of free cash flow. That last point, attractive free cash flow, highlights a very significant differentiator for Gatling.com Group, among most of the other publicly traded companies in the U.S. targeting the high growth online Gatling industry. Although we do not currently have clarity on any additional U.S. state launches for sports betting before January 2024, we are today raising our guidance for full year 2023, as Elias will detail later in the call. First quarter revenue rose 36% to $26.7 million, reflecting a more than 30% increase in North American revenue and continued strength in the UK and Ireland, with revenue growth of 36%. We generated $10.7 million of adjusted EBITDA and $6.2 million of free cash flow. Our first quarter results benefited from sports betting launches in Ohio and, to a lesser extent, Massachusetts. as well as strong results for iCasino across both North America and in a number of our European markets. We delivered over 88,000 new depositing customers for our online gambling operator clients, an increase of 31% over Q1 2022. Our Q1 2023 NDC growth is even more impressive when you consider that last year's first quarter strongly benefited from New York's massive sports betting launch. Our growth in NBC's continues to be driven by an expansion of our portfolio of assets as well as our continuously improving ability to leverage our proprietary technology and data science systems to convert and monetize high intent traffic. Our focus on organic growth paid off again, with the first quarter of North American revenues increasing 33% year-over-year to $14.1 million. Revenues from the UK and Ireland increased 36% year-over-year to $8.5 million. This was our fifth consecutive quarter of record revenues in the UK and Ireland, despite having operated in these markets for over 10 years. Last month, we got the long-awaited white paper on the review of the online gambling industry Many of the proposals in the white paper have already been implemented by the industry and we expect no meaningful impact on our business from the proposed measures. Our media partnership with McClatchy performed as expected during the seasonally stronger winter sports calendar. We continue to expect meaningful revenue from our Gannett partnership this autumn as the NFL season gets underway. And we have already launched our new section on USA Today, which is available at usatoday.com slash betting. BonusFinder.com continued to perform well and in line with our expectations for the quarter. Rotowire had healthy growth overall with performance marketing revenues and subscriptions continuing to grow in the first quarter. KPIs from the Rotowire subscription business were at record levels and the business overall continues to deliver on our strategic objectives for the acquisition. Our continued focus on the positioning of our websites and leveraging the business intelligence capabilities of our technology stack has created an execution gap between Gantling.com Group and our publicly traded peers. There is no change to our plan to continue to invest prudently in the business to further improve our own and operated websites as well as to optimize our media partnerships. We've made great progress with the development of casinos.com, which we expect to launch this summer. Development and optimization of both McClatchy and Gannett partnerships will continue throughout the remainder of 2023. It's noteworthy that these two very large news organizations chose Gannett.com Group among all of our peers to monetize the immense opportunity in US school setting available to them. I believe that our partnerships speak to their understanding that among all of the online gambling affiliate companies, we have separated ourselves in terms of how we leverage our digital expertise and proprietary technology to maximize outcomes for our website visitors and gambling operator clients. Further optimizing the footprint of our media partnerships will create yet another competitive gap compared to our competition. The national and local brand footprint of Givet in the U.S. is unmatched by any other daily newspaper publisher, and we look forward to unlocking the full potential of both partnerships over the coming years. Now I'd like to turn the call over to our CFO, Elias Mark, to discuss our first quarter results in detail.

Thank you, Charles, and welcome everyone. As Charles mentioned, we saw another record quarter of financial results during the first quarter. Revenues increased 36% to 26.7 million compared to the prior year, or 40% in constant currency. The increase in revenue was driven by a strong growth in NDCs in both North America, the UK and Ireland, and the rest of the world. New depositing customers in the course increased 31% to more than 88,000. Also, sales during the first quarter from our media partnerships and the subscription business of rotowire.com amounted to $1 million. Social operating expenses were $17.5 million, an increase of $3.5 million. Social operating expenses included $0.9 million of fair value movements in contingent consideration related to the bonus finder acquisition. Adjusted for this fair value movement, adjusted operating expenses were $16.6 million. an increase of 22% in constant currency. The increase was driven primarily by additional headcounts across marketing, product, sales, and technology functions for public company expenses. Amortization expenses decreased to 1.4 million as short-bid assets from the road to wire and bonus binder acquisitions were now fully amortized. For the full year 2023, we expect to incur a motivation of approximately 1.6 billion. Hiring in the first quarter continued at a more moderate pace and was well below our pace in 2022. Current staffing levels are close to being able to support our near and long-term growth objectives. While we expect to continue to hire selectively, we expect operating leverage from revenue outflow and operating expenses for the full year. We expect to continue to deliver substantial daily cash flow. Net income totaled $6.6 million or $0.17 per annuity chart compared to net income of $4.5 million or $0.12 per annuity chart in the same period in the prior year. Adjusted the per-value movement in contingent and at the first consideration, adjusted net income in the quarter was 7.6 million and adjusted earnings per share of 20 cents per value to share. We will continue to adjust net income in this manner until the end of the honour period, the bonus standard, at the end of 2023. We generated first quarter adjusted EBITDA of 10.7 million compared to 7.2 million in the same quarter in the third year. Its 49% growth represents the leverage we gained as our top-line growth outpaced its spending growth. The adjusted EBITDA margin was 40% compared to 37% in the first quarter of 2022. Total cash generated from operations of 7.1 million increased from 3.6 million in Q1 2022, driven by the strong year-over-year revenue growth. We generated first-order free cash flow of 6.2 million as CapEx normalized following the expansion of our domain name portfolio in 2021 and 2022 to include such new marquee names as Cousinos.com. We remain able to entirely fund our organic growth initiatives from operating cash flow while continuing to generate positive free cash flow. as of March 31st, 2023, totaled 33.6 million, a 3.9 million sequential increase. In respect of the grade performance in 2022, we were pleased to pay the Donor Finder team the maximum amount possible under the terms of their own agreement at the beginning of Q2 2020 grade. In consideration was 20 million, of which 50% was paid with unregistered GAM charts. Turning to Outlook. We are now through the season internal period of the fall and winter sports calendar. We expect a normal seasonal pattern in the second and third quarters as a result of fewer sporting events in comparison to the fourth quarter of last year and the first quarter of 2020. In our view, the long performance marketing services for the online gambling industry remain strong and it's even more valuable for operators as they continue to make progress towards delivering profitable As we continue to gain additional scale, particularly through increased delivery of NFTs to our customers, that scale gives us additional pricing power. We will continue to monitor consumer behavior closely in both Europe and North America, but reflecting our Q1 and the Trump stock C2, we're not being amicable back from consumers today. Given these factors, and on the back of our Trump Q1 performance, this morning we raised our 2023 full year revenue and adjusted EBITDA items. The new ranges are for revenue in the range of 95 to 99 million compared to the prior range of 93 to 97 million. The new range represents year-on-year growth of 24 to 29%. We now expect adjusted EBITDA to be between 33 and 37 million as compared to our earlier expectations of 32 to 56 million. The new range represents year-on-year growth of 37% to 54%, and a full-year margin of 36% at the midpoint of the respective revenues and adjusted EBITDA ranges. As we highlighted when we provided our initial outlook for the year, our 2023 guidance contains no new market launches or impacts of any future decisions. Our guidance for 2023 now seems to yield us a change rate of 1.08%. Under the company's authorized share buyback program, we have purchased a total of 107,836 shares at an average price of $9.48 today, representing about 10% of the total turnover in offline. We will continue to opportunistically repurchase shares when we see value and are able to meet demand. In September, we filed an S3 registration statement to enable the company to issue up to 100 million in securities. As a result, the company is able to raise additional capital to finance certain strategic transactions that support our goal of increasing shareholder value. Earlier this morning, we filed an additional S3 registration statement to enable some of our long-term pre-IPO shareholders to sell a portion of their shares in the future. This would increase supply for our free flow, but not dilute our existing shareholders. With that, I'll turn it over to John.