Gambling.com Group Limited

including the recent addition of FreeBets.com, along with our best-in-class technology stack, sets the company up for long-term growth. And as new international markets continue to be regulated, new states approve online sports betting, and iGaming becomes a bigger part of the online betting ecosystem in the U.S., our growth opportunities will only continue to expand, just as they have done for the past 18 years. At the same time, we will further extend our successful track record of execution to capitalize on these secular growth opportunities and continue to do so in a highly capital efficient manner, ultimately driving substantial increases to cash flow. Last year, we exceeded 100 million in revenue for the first time. While we have seen many milestones on our journey, this was the most tangible evidence yet of our growing scale when i look forward it is clear what the next major milestone will be 100 million in adjusted ebitda this is the logical next step for the company to drive towards as we continue to execute on all of the organic growth opportunities we have and layer on additional accretive acquisitions which will expand our footprint within the online gambling ecosystem Being at the center of two very important long-term trends will help us hit this next milestone. Gambling is digitizing. The revenue of online gambling has exceeded the revenue of land-based gambling in many markets throughout the world where it has been regulated for some time. In certain cases, online gambling is over 90% of the total gambling market. This trend for iGaming still has a very long way to go in the U.S., the world's largest casino market. where the percentage in 2023 was only 10%. The second key long-term trend is the ongoing digital revolution in advertising. Whereas marketers were previously blind, now they can see due to the clean and clear attribution available from all digital channels. GAMI.com Group sits at the intersection of both of these clear long-term trends with our technology platform and portfolio of assets. But at the center of that portfolio is a core of indomitable brands like Gambling.com, PhotoWire.com, and Bookies.com, unique assets which will forever be at the heart of online gambling. All of us at Gambling.com Group are excited to be on this journey and eager to capitalize on these opportunities. There have been some significant shifts in the digital landscape over the past 10 days, which are having an effect on every corner of the internet. Over the past several years, large websites with strong reputations like newspapers have increasingly pivoted to performance marketing to drive revenue from commercial content like coupon codes, credit card offers, and sports betting. Given their strong reputations and attention to content quality, they have succeeded in ranking competitively in Google's results for these commercial terms and created new lines of revenue for themselves. This has been a boon for these legacy media organizations, which have been searching for ways to improve their digital monetization. In many cases, these websites have partnered with industry specialists in each vertical to improve the quality of the content and maximize the business potential of these efforts. This is exactly what we have done with McClatchy, The Independent, and Gannett. As with everything online, there are also examples of abuse. The most egregious abuses of a site's reputation occur when hackers gain unauthorized access to a website and put up individual pages targeting commercial content that are poor quality and stick out like a sore thumb. There are also many shades of gray between this sort of obvious abuse and the relevant and accurate commercial content that powers many of these legacy media organizations. Google has been working to reduce the prevalence of these instances of queer abuse. For many months, Google's human reviewers have been internally flagging content which they perceived to be violating their policies of what they refer to as site reputation abuse. On May 5th, Google activated the new policy publicly, informing webmasters that certain content may violate the policy and demoting such content in Google's search results. The amount of content that has fallen within the perimeter of Google's new policy is greater than anyone would have expected. Whether that content was created by the legacy media organization entirely on their own, or with the help of a specialist partner. This is not a typical update to Google's algorithms, but rather a global policy shift which affects all industries, not just online gambling. Google has effectively moved the goalposts on what they deem to be acceptable locations for particular types of commercial content. Virtually all media partnerships including the ones in the online gambling industry and our own, have been affected. We remain committed to our media partners as they organize to make a concerted effort to push back on what they perceive to be an overly broad implementation of this new policy. After all, newspapers were making money off of coupons long before the Internet ever existed. For the avoidance of doubts. Our owned and operated sites are unaffected and will benefit from less competition in the search engine results pages from legacy media websites. We do expect to receive more traffic directly to our own specialist brands like gambling.com, rotowire.com, and bookies.com, and we can already see signs of this shift. With a higher proportion of traffic flowing directly to our owned and operated assets and lower fees to pay out to our media partners, the net effect on EBITDA of these changes will be limited. Revenue, however, will be directly affected. The strength of our owned and operated assets and the resiliency of our business enable us to continue to expect healthy year-on-year growth and adjusted EBITDA despite this major and unexpected shift in the digital media landscape. We are updating our revenue guidance today to 118 to 122 million and updating our adjusted EBITDA guidance to 40 to 44 million. The midpoint of our adjusted EBITDA guidance still represents year-on-year growth of 14%. I will add that given the better long-term competitive positioning of our owned and operated websites, we remain comfortable with the current consensus estimate for 2025 adjusted EBITDA. This would represent approximately 25% year-over-year growth and put us more than halfway toward our goal of reaching $100 million in adjusted EBITDA. Now let me turn the call over to Elias for a view of the first quarter financial highlights.

Thank you, Charles. Revenue of $29.2 million was a first quarter record as we delivered more than 107,000 MDCs in Q1, up 22% compared to the year-ago period. The 9% year-over-year revenue increase reflects growth in each of our global regions in which we operate. North American revenue, our largest market was up 5% year-over-year. UK and Ireland rose 5%. Other Europe grew 39%, and the rest of the world grew 29%. North American revenue benefited from a few weeks of operations in North Carolina following the market launch in March, but this is compared against Ohio and Massachusetts, both launching in Q1 of 2023. We closed our acquisition of FreeBets.com and related assets on April 1st, so we did not record contributions from these assets in Q1. Gross profit increased 5% or 1.3 million year-over-year to 27 million. Cost of sales grew year-over-year to 2.2 million as a result of our successful ramp of the Gannett and independent media partnerships. On a sequential basis, however, cost of sales decreased substantially as the portion of revenues for media partnerships declined from an exceptionally high Q4. Total operating expenses of 19.1 million in the first quarter of 2024 increased 9% compared to the year-ago period, or 7% in constant currency. We expect to generate operating efficiencies the full year, as revenue is still expected to grow faster than total expenses. Our workforce is right-sized today, and our internal focus is very much on ROI-focused allocation of both capital and human resources. Adjusted EBITDA for the first quarter of 2024 was 10.2 million compared to 10.7 million in the year-ago quarter. Q1 adjusted EBITDA margin of 35% rose 300 basis points on a quarterly sequential basis, consistent with the midpoint of our full-year guidance at 35%. Adjusted net income and unadjusted net income for diluted share for the first quarter of 2024 were flat at 7.5 million and 20 cents respectively compared to the year-ago period. Free cash flow increased 32% in the quarter to 8.2 million as we converted 28% of revenue and 81% of adjusted EBITDA to free cash flow. During the first quarter, we continued to repurchase shares buying approximately 329,000 ordinary shares at an average price of $9.10 for a total consideration of approximately $3 million. At the end of Q1, we had approximately $3.9 million left on our existing share buyback authorization. In May, the Board approved an expansion of the share buyback program by authorizing an additional $10 million. As of March 31st, total $25.3 million, flat quarter-on-quarter, reflecting very strong operating cash flow offset by share repurchases and the final deferred consideration payment for the acquisition of Road to Wire of $5 million. At the beginning of Q2, we paid the first installment of $20 million for the acquisition of FreeBet.com and related assets, financed by cash on hand and a $16 million drawdown from our $50 million credit facility. At the end of April, we made a final deferred consideration payment for the acquisition of BonusFinder of $13.4 million using cash on hand. Despite now expecting substantially less revenue from our media partnerships and expecting no further state launches outside of North Carolina in 2024 compared to three launches in 2023, we are well on our way to deliver overall revenue growth and strong growth in adjusted EBITDA for 2024. Our updated guidance is for revenue in the range of 118 to 122 million and adjusted EBITDA in the range of 40 to 44 million. Our previous guidance contemplated cost of sales of 10 million in 2024. The vast majority of cost of sales represents fees paid to media partners. We now expect cost of sales to be approximately 4.8 million for the full year of which 2.2 million was incurred in Q1. The guidance does not include any contribution from additional acquisitions other than the already closed acquisition of FreeBets.com and related assets, and assumes an average EUR to USD exchange rate of 1.09 throughout 2024. As Charles highlighted before, our expectations for 2025 adjusted EBITDA have not changed. With that, I will turn back to Charles.

Thank you, Elias. We are pleased to be off to a strong start of the year, which sets up the company to deliver growth year-on-year in 2024. Despite the headwind we face near term to our immediate partnership revenue, I expect the company to continue to take market share in North America and elsewhere. I'd like to thank our sensational team for delivering a great Q1 and for positioning the company for continued growth in 2024. Operator, we are happy to open up the line for questions.