Group Limited

Q1 2024 Earnings Conference Call


spk11: including the recent addition of, 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. 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,, and, unique assets which will forever be at the heart of online gambling. All of us at 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,, and, 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.
spk05: 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 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 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 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.
spk11: 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.
spk00: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. We ask that you limit your questions to one and a follow-up so that others may have an opportunity to ask questions. You may re-enter the queue by pressing star 1. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from David Bain with B. Reilly Securities. Please proceed with your question.
spk04: David Bain, B. Reilly Securities, Great. Thank you. Charles and Elias, just for clarity, I think you were pretty clear. Google's new treatment of legacy media does not impact how you view 2025 from the lens of consensus estimates. Did I understand that correctly?
spk11: Yeah. From the lens of consensus, even though revenue would be, you know, we're not going to drive as much revenue without media partnerships, but the profitability of the business X media partnerships is, is even better. So, we're very comfortable where the street is at in terms of EBITDA for 2025.
spk04: Perfect. And Charles, you know, I'd love to follow up on the $100 million EBITDA milestone target. If you could help us, you know, a little bit more with the pathway of how to get there, the primary catalyst or assumptions you're using, underlying TAM growth, new acquisitions percentage, anything specific and big picture thoughts on timing, that'd be awesome.
spk11: You got it. Well, with $42 million in EBITDA expected for full year 2024, according to the midpoint of our updated guidance, we would only need to continue to grow organically at a low-ish CAGR in the mid-teens for a few years and add on a bit of extra scale through additional M&A to get there in the mid-term. We have widened the aperture in terms of what we are considering from an M&A perspective and are no longer only looking at SEO-driven gambling affiliate businesses. There's a wide universe of technology-first companies in the online gambling ecosystem, companies which are serving our same clients and end users that fit into our culture of driving high growth with high margins. For example, we are considering businesses which drive traffic and value for our B2B online gambling operator clients with channels other than SEO. And we are increasingly considering businesses which have highly predictable subscription revenue, like the Rotowire acquisition, where we have grown revenue by over 50% since buying the company.
spk04: Okay, very helpful. Thank you.
spk00: Our next question comes from Jeff with Stiefel. Please proceed with your question.
spk09: Great morning, Charles. Always thanks for taking our questions. Maybe starting off on on the Google update and the related impact to your guidance. I think we're only about a week in of results here, but Charles, just curious if you're seeing evidence thus far of traffic shifting into your 100% margin-owned affiliate sites and away from the media partnerships. As a follow-up to that, if you just contrast the guidance revisions to at least the comments you made on cost of sales guidance. It seems to me there isn't much of an impact or much of a benefit baked into 2024 guidance for potential uplift to your own sites as traffic redirects. So can you just expand on that as well if I'm reading that correctly? Thanks.
spk11: Thanks, Jeff. The first part of the question was, You know, have we seen an impact, a positive impact on our un-operated assets? And we have. You know, that change started immediately. We have seen an increase in share of voice and an improved search visibility across multiple of our key assets. The way you should think about this is we, you know, we run a precision machine. And when something changes like this, we need to recalibrate that machine. And that takes a little bit of time. But once we do that, we will start to get better clarity into exactly where and how much of a tailwind this is. You know, it is absolutely a tailwind. You know, it's a very positive long-term development. But, of course, we have optimized ourselves to help our media partners. That has been the strategy that has been most effective for ourselves and many of the other large performance marketing companies in the industry. But we're confident, based on the data that we have seen, that we will be able to achieve our updated guidance, which still has year-on-year adjusted EBITDA growth of 14% at the new midpoint.
spk09: That's perfect. Thanks for that color, Charles. And then maybe zooming out a little bit, but staying on the same topic, I guess, how does this change affect your views of media partnerships and your strategy there, you know, if at all? And if it does, can you just remind us sort of, you know, contract length time with the various partners? Thanks.
spk11: Yeah, so... These media partnerships, they're not going to zero. They're not going away. We remain committed to all of our partners, and media partnerships have been a net positive that has driven incremental EBITDA for us, and that's how we optimize this business. We're trying to drive incremental EBITDA. they will be diminished it's not going to be anywhere near and big of a portion of our business or or i think you know and i think what the changes you'll see with us is going to be the same across the board for all manner of companies which have cut deals in the same way that we have um but it's not it's not going away you know we we're we have chosen to be very picky on who we partner with and we've made real commitment to the people we partnered with and we intend to support them and help them navigate these changes and still maximize the business opportunity between the two companies. Um, we have, uh, generally speaking, uh, tried to sign up, uh, folks on longterm deals. Uh, but you know, we, we have cut deals which we're happy with and, uh, we don't, we don't, at this time have any concerns about these partnerships going forward and how profitable they will be and whether it makes sense for us.
spk06: Great. Thanks very much. I'll pass it on.
spk00: Our next question comes from Barry Jonas with Truist Securities. Please proceed with your question.
spk02: Hey, guys. This is Ramin Zobani on for Barry. Thanks for taking our question. You mentioned in your opening remarks that your media partners may have some kind of avenues to push back against some of the Google methodology changes. Can you talk about some details on what that might look like?
spk11: Yeah, I don't want to speak for our media partners because, of course, they're their own businesses. it's these changes are a bigger headwind for for our partners than they are for us so it's entirely logical that they're going to do whatever they can to try to bring these update this policy change the implementation of the policy speak to google uh you know call call anyone they can to to try to you know better understand what what the intent is and you know whether they can convince them that they've gone too far. You know, Google is the Supreme Court of the internet and there's, it's very, you can't appeal. So, you know, we think these changes are largely here to stay, but there may be, there may be, they may walk back some of this at the margins, but I think generally speaking, the overall opportunity for our partners and the media partnership world is, is, is simply going to be less than it was before.
spk02: Got it. Makes sense. Um, and then just shifting over to, uh, to free bets a little bit now, now that you've had some time under the hood, um, can you talk about how the integrations proceeding and, uh, maybe any incremental synergy opportunities you've identified, uh, following the acquisition? Sure.
spk11: Everything thus far has gone to plan. We closed as expected on April 1st and we have had control of the assets for over a month at this stage. We are focused on integrating these new assets into our technology systems and operating processes. We have onboarded a number of new staff members and are likewise integrating them into our culture and teams. It remains super early for this new chapter for these assets But we have more confidence than we have ever had that we will be able to realize substantially improved operating performance for these websites in the medium and long term. Just to add a bit of color on the deal itself, with no additional new state launches expected in the U.S. until sometime in 2025, growth in the region will naturally moderate. We made a strategic decision last year to prioritize growth this year in a portfolio of assets outside the US. And these assets, they monetize some of the most evergreen and consistent online gambling markets in the world. So we are confident that this deal has dramatically improved our competitive positioning and given us better market share in some of the world's most desirable markets. online gambling market.
spk06: Great. Thanks so much for that, Colin. Appreciate it.
spk00: Our next question comes from David Katz with Jefferies. Please proceed with your question.
spk08: Morning, everyone. Appreciate you taking my questions. Just doubling back on some of the earlier commentary about your owned sites. There's been a couple of questions about it. Are you able to sort of quantify or put some brackets around or some boundaries or, you know, qualitatively or quantitatively sort of what that traffic improvement is so far and what it might become. And then I have a follow-up.
spk11: Hey, David. It's, you know, we operate a portfolio, so every site is different. Some sites have seen more increases in share voice and positioning than others. Rotowire is looking quite good. is looking good. But we're at the beginning of the part of the year, which is the seasonally slowest part of the year for us. So as you look at the KPIs coming in, traffic, referrals, et cetera, it's trending in the direction that you would expect. And it all gives us a nice warm, fuzzy feeling, but it's not, given the time of year and the overall levels of seasonality, it's difficult to draw precise conclusions about what that means exactly for the rest of the year. Therefore, we have taken a conservative view on our guidance for the rest of the year and will be in a position to, of course, update that and and hopefully improve it as we gain more clarity about the magnitude of the new tailwind that we have, which is not trivial.
spk08: Got it. Okay. That'll do for now. With respect, Charles, to the earlier commentary about sort of refocusing some of your M&A lenses, can you, and I ask this all the time, can you help us sort of put some boundaries around, you know, size, you know, type, and just help us understand what that new field of play really is. And, and, you know, size obviously being really important.
spk11: Yeah. I think you, you can safely assume that anything we do will be in the online gambling industry. Of course, the online gambling affiliates out there are, are always an option, but increasingly our heads are in a different place. We want to build a business which has highly predictable revenue and therefore prioritizing M&A from the perspective of businesses which have highly predictable revenue is a priority. But we're not going to go do something completely left field, of course. So anything we would do would have some sort of connection into Galley Affiliate, some sort of synergy, some sort of adjacency and ability to perhaps bolt on our model to other assets or at least share expertise, content, quality, knowledge, data, et cetera, in a way where there's some legitimate one plus one is more than two situation.
spk08: In terms of size... Sorry, please finish. That's where I was going to follow up. Keep going. Sorry.
spk11: In terms of size, we've always said kind of bigger is better. It's the same amount of work to do a $20 million deal as it is to do a $100 million deal. So And $100 million companies tend to have better management, deeper bench of talent, more sophisticated financial process, better organized, cleaner forecasting. So why not just do the $100 million deal? We're not at all interested in issuing any shares at the current level, as I'm sure you can appreciate. But nevertheless, we are keen on growing this business through M&A. And look, we have our new $50 million debt facility with Wells Fargo. Wells has been great partners, and it would be possible to arrange additional debt beyond that $50 million with Wells if we had a clear use of proceeds. Understood.
spk08: That's what I was looking for. Thank you.
spk00: Our next question comes from Chad Pan with Macquarie. Please proceed with your question.
spk10: Morning, gentlemen. Thanks for taking my question. With the updated revenue guidance of 10% year-over-year growth, can you help us think about the geographical breakdown of that 10%? I know historically, obviously, North America has been expected to grow significantly higher than the UK and I, but Post these Google changes, do you have an updated view on what the regions could look like? Thanks.
spk11: Hey, Chad. In the first quarter, we grew in all geographies. Revenue from other Europe accounted for 13% of revenue and grew 39%. The rest of the world was 5% of revenue and grew 29%. We expect other Europe and the rest of the world will continue to demonstrate strong growth this year. And for North America and the UK and Ireland, we expect the impact on media partnership revenue as a result of these Google changes to dampen 2024 growth. Our guidance assumes that North Carolina will still be the only state in 2024 compared to three state launches in 2023. So if you look at it on a kind of like for like basis, there's still quite substantial growth in North America, but in aggregate, growth rates are going to come down as a result of the change in revenue from media partnerships.
spk10: Okay. Makes sense. Thank you. And then, Charles, you've noted that you're agnostic between CPA and rev share with some of the U.S. shift or the market share shifts moving up to the top two. Is there any view in terms of what the other tiers of operators, how they would like to work with you guys, CPA, RevShare, if there's any change in terms of how we're thinking about that for 24, 25, or just generally speaking in your conversations with them? Thanks.
spk11: Yeah, yeah. My perspective on the operators in the U.S., you know, With fewer state launches, operators have more bandwidth than they did previously, and therefore they're drilling into their businesses more deeply than they did before. This means that they're reviewing marketing performance more scientifically, and we expect that that will continue to show that the affiliate channel delivers some of the most consistent and straightforward ROI in the industry. I'd expect operators to continue to spend and invest in the way they are now until we see more iGaming states come online, which will increase player LTVs and catalyze more aggressive spending across all channels. A lot of the US operators, especially on the bigger end, they still have hundreds of millions in sponsorship commitments. that they signed up for at the beginning of the sports betting boom. And these are only rolling off gradually. And I expect that as those roll off, a substantial budget will be freed up, and that will come our way. So a lot of these sponsorships, not all of them, but a lot of them are low or no ROI endeavors. And I think that... The experimentation phase is over. Operators understand where they're seeing returns. Generally speaking, it's not on the sponsorships. And they will, you know, there's hundreds of millions that's going to free up. And I think that that's going to ultimately result in a much more aggressive posture from some of the operators in time. On the demand side, more and more people are coming into the industry for the first time, and the TAM, therefore, continues to grow without any material changes to the operator mix.
spk06: Thank you. Appreciate it.
spk00: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad our next question comes from Ryan with Craig please proceed with your question.
spk07: hey guys curious just kind of the media property saying there but curious what percentage of leads on those media properties were direct to the website thinking of the. Millions of loyal viewers they have for other content and then cross promoting them versus. going to Google and basically leveraging that domain to get to the affiliate pages on say USA Today?
spk11: Yeah, it's a good question. You know, we use the phrase high intent a lot and that's a key phrase because it really tells you everything you need to know. You know, if somebody goes to Google and searches for something, it's high intent. They really want it. Not only do they want it, but they want it right now. And the fact that they want it right now is kind of the important part. You know, a lot of these people that have come through our media partners and signed up for online gambling sites. You know, these are people that would have used these sites in the normal course of business, but in a particular customer journey where they are, are converting into a new depositing customer, they are very, very highly likely to have come through a search engine. So, you know, these media partnerships will no doubt shift away from that level of search focus and focus on high intent. You know, there are, of course, other ways for us to help our partners monetize their existing audiences, which are incredibly sizable. And, you know, moving forward, I think we'll be looking from both sides to help them in all the ways we possibly can. But, you know, the big driver of this whole thing has been search and high intent.
spk07: Good. Then just on guidance, using your cost of sales assumptions that you gave previous quarter and now, it implies all of the revenue or almost all of it, guidance revisions from the media properties. I guess is that correct? And then to confirm, I guess that implies that you aren't assuming any incremental benefit to your own domains even though you've started to see kind of early signs of that?
spk05: Yeah, Ryan, it's a fair assumption. We don't take away all of our media partnership revenue from the reminder of the year, but a very big proportion. And like Charles said before, we are conservative in our assumptions for the underlying growth in our owned and operated sites. We see some early signs of it. We expect that to happen in the midterm, but it's we need to kind of recalibrate the portfolio, and it takes a little bit of time. So we don't expect in our guidance a significant effect in 2024, but we are increasingly confident about strong underlying growth for 2025. Very good. Thanks, guys.
spk06: Good luck.
spk00: Our next question comes from Clark Lampin with BTIG. Please proceed with your question.
spk01: Thanks. Good morning. I've got two. I wanted to start with the earlier comments around consensus EBITDA. You mentioned you're comfortable with this sort of mid-50s mark for 25. If we're thinking about, I guess, bridging from the midpoint that we're seeing this year around 42 to that 55 next year, however you guys are comfortable at this stage, understanding you're not giving formal guidance, Help us understand, I guess, that bridge, sort of implied EBITDA growth of around 31% versus top-line trends that are currently running in sort of the 10% ballpark. And then question two, Charles, just on the performance marketing backdrop, you mentioned channel ROIs still healthy. You're taking share. Competitors are also experiencing challenges. Why widen, I guess, the aperture right now, as you said, and start committing capital elsewhere rather than maybe drilling down organically on the core if the sort of thesis is unchanged. Has the view, I guess, around the sort of medium-term opportunity there changed in any way? Thank you.
spk11: Hey, Clark, just to pick up the second one. Because we have such profitability and high cash flow, we can do both, okay? We can prioritize. We are adequately investing into our assets. And we expect those to drive growth going forward, as they always have. And we have the balance sheet to pursue M&A as well. But, you know, there is an increased focus on revenue, which is more predictable. And if we go out and do another acquisition of a performance marketing company, we don't really address that. In terms of growth next year, you know, we – is doing very, very well around the world. In the past, it was just a U.K. website, and then it was a U.K. and U.S. website, and we keep bringing it into new jurisdictions. We just launched a Greek version of, I think, this week, and we have a new Greece's one of two markets in Europe where you actually need a license and an affiliate. So we have a Greek license now and we're live with and we expect to take market share there. I mean, you know, we were starting from zero and we're bringing in a killer asset. So, um, it's things like that, you know, the free acquisition, we see, as we had said, really quite a lot of unlocked potential. but we've got to re-platform it first. We need six months to move it onto our tech stack to integrate it fully into our deals and our processes and everything else. So you don't really see that upside until that's done, and that'll be done Q4, end of Q3, Q4. So we'll start to really feel the benefits of that a little bit this year, but mainly next year. Another example here is Romania, it doesn't sound like a massive growth opportunity, but it's a consistent and good European regulated sports betting and arguing markets. Romania is the other European jurisdiction that requires a license for affiliates. We've applied and we're apparently hours away from getting our Romanian license. We'll go live with and Romania as well. Again, Our assumptions at this point are not for massive US market expansion in 2025. We think there'll be some new stock state launches probably towards the back half of 2025. But as you know, we don't put new state launches in our guidance. So the growth bridge to get from where we are to that 2025 adjusted EBITDA figure is really organic growth from our core assets.
spk05: I can add a little bit to that. I think if you look at the midpoint in our updated 24 guidance, that implies growth of, I think, 14% year-over-year. And the midpoint, if I'm not wrong, of 2025 street consensus is 54, so that will represent 26% growth from 2024 to 2025. Not all of that growth is going to be reflected in growth of revenue. As I alluded to in the call, we do see strong operating efficiencies in our open. And the revenue growth is going to come from our owned and operated websites, which have 100% gross margin. And when you add operating leverage from operating expenses, not going to grow that substantially between 24 and 25. That's how you break that down.
spk03: Thank you.
spk00: There are no further questions at this time. I would now like to turn the floor back over to Charles for closing comments.
spk11: Thanks, everybody, for joining us again today. We are off to a great start this year, and I'm sure that 2024 and beyond are going to be another year of fantastic growth for the group. Thanks for your interest and catch you for the Q2 results. Bye-bye.
spk00: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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