Gambling.com Group Limited

Greetings. Welcome to Gambling.com Group Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Peter McGrath, Senior Vice President of Investor Relations and Capital Markets. Thank you. You may begin.

Thank you. Hello, everyone, and welcome to Gambling.com's fourth quarter 2024 results call. I'm Peter McGough, Senior VP of Investor Relations and Capital Markets, and I'm joined by Charles Gillespie, Gambling.com's Group's Co-Founder and Chief Executive Officer, 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 the downloadable version of the presentation is available there as well. A webcast replay will also 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 uncertainties 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'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 except to the extent required by applicable securities laws. During a call, there will also be a discussion of non-IFRS financial measures. The 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 press release, both of which are available in the investors tab of our website. I'll now turn the call over to Charles.

Good morning, and thank you for joining us today. GAMI.com Group had a tremendous fourth quarter with revenue of 35.3 million. Adjusted EBITDA of $14.7 million and free cash flow of $13.2 million, finishing 2024 in style with record quarterly and full-year financial performance. Full-year 2024 revenue and adjusted EBITDA rose 17% and 33% respectively, driven by global iGaming growth and the highly accretive acquisition of FreeBets.com. This outperformance reflects our relentless focus on execution and and our diversified market exposure with a prioritization of iGaming revenue. As strong as our execution was last year, we expect to accelerate our growth in 2025. With our biggest and most talented team ever, a greater ability to drive high intent traffic to our online gambling operator clients, higher global penetration and an expanded product portfolio that now includes all data solutions for consumers and our operator clients, we are positioned for full year revenue growth of 35% and adjusted EBITDA growth of 40% as indicated by the midpoints of our initial guidance for the year. As we hit our targets for the year, our performance will demonstrate that we continue to close in on our goal of generating 100 million in annual adjusted EBITDA, a goal I introduced in May last year when we only had 37 million in adjusted EBITDA during the preceding 12 months. As we work toward our goal of 100 million in adjusted EBITDA, the midpoint of this year's guidance of 68 million implies that we will be more than halfway there already in 2025. Our most exciting growth driver for this year will come from our expanded product offering following the January acquisition of Odds Jam and Optic Odds. This acquisition expanded our footprint in the online gambling ecosystem, providing another strong growth catalyst while increasing the overall proportion of our consumer and enterprise recurring subscription revenue. Like freebest.com, this acquisition demonstrates once again that we can put forth a clear framework and vision for M&A and then precisely deliver within those parameters. These acquisitions have created immediate value for our shareholders while strategically positioning us for the long term. Over the first nearly 80 days of owning our new odds businesses, We have been very pleased with the integration and are very excited by the expertise and capabilities of our 40 new colleagues. We remain confident in our ability to grow incremental adjusted EBITDA from these businesses by at least 20% this year. And we are excited about the growth trajectory of the business's current products and services and the long-term future prospects of new businesses we can launch with this one-of-a-kind and highly valuable platform. On the consumer product side, Odds Jam's current subscriber base is highly profitable and we are confident we can grow this base while maintaining margins. We are also very optimistic about the opportunity to leverage our 500 plus operator relationships to grow OpticOdds' nascent enterprise subscription revenue. While Odds Jam is the larger business today and continues to grow, we believe the growth opportunity for OpticOdds is substantially larger still. Opticod is starting from a smaller base and has a very attractive business profile, which involves long-term, high-value contracts as a result of playing a key role in solving a critical risk management problem for operators globally. Together with the Rotowire subscription business, we are pacing for recurring subscription revenue to account for more than 20% of total group revenue this year. While the whole GAM team is excited is very excited about our shiny new toys with Odds Jam and Optic Odds. It should not overshadow the continued strength of our core affiliate business, which just had its best quarter in our 19-year history. iGaming revenue grew in 2024 across all of our operating regions and will continue to do so this year, driven by continued strong organic growth, as well as a full-year benefit from our acquisition of FreeBets.com. That tactical acquisition further strengthened our UK and Ireland market performance, while also providing a strong tailwind for our activities across other European markets. And in North America, we continue to grow our market share and benefit from improving iGaming pricing trends. Throughout 2025, we are confident that our ability to monetize the full benefits of our showcase brands, such as gambling.com and the growing performance of casinos.com, along with the optimization we've achieved now for FreeBets.com, will continue to further differentiate us from our competitors and drive record iGaming performance this year. Longer term, we expect additional states to approve iGaming as they seek to address budget issues and give players what they want. Given our unmatched industry experience and footprint, the expansion of iGaming in the U.S. will result in significant top-line and cash flow growth. Another growth driver this year will be organic growth from sports betting. Last year had challenging sports betting comparables due to the lower state launch activity in the U.S. and the blowout performance of ESPN bet in Q4 23. We expect a return to growth in our North American sports business this year, and that's before the anticipated launch of sports betting in Missouri toward the end of this year and which, per our policy, will not be included in our guidance until the launch date is confirmed. Following our record 2024 performance with these growth drivers and our team's ability to consistently execute, our confidence in our near and long-term outlook has never been higher. And that starts with this year as we are on track to generate another year of record revenue, adjusted EBITDA, and free cash flow on our past 100 million in annual adjusted EBITDA. Now, let me turn the call over to Elias for a review of the fourth quarter and full year financial highlights and details on our 2025 outlook.

Thank you, Giles. Corrected Q4 revenues of 35.3 million was ahead of expectations, and we delivered over 145,000 MVCs to our customers. This 9% year-over-year revenue increase was driven by growth in casino revenue across all regions, which more than offset the decline in North American sports revenue. The 9% NDC decline reflects the previously discussed impact from no new state launch activity, compared to the launch of sports betting in Kentucky and ESPN bets 17 state launch in Q4 of 2021. as well as significantly lower media partnership activity in the quarter. Revenue in the UK and Ireland, other Europe, and rest of the world continue to see very strong growth driven by our core brands and our acquisition in April of FreeBus.com and related assets. Gross profit increased 21% year-over-year to 33.1 million. Cost of sales was 2.2 million, down 57% year-over-year as a result of the lower media partnership revenue. Gross margin increased from 84% in the last year's fourth quarter to 94% in Q4 2024. Total operating expenses increased 21% to 23.3 million, reflecting increased headcounts and increased amortization expenses related to the freebest.com acquisition. Operating expenses are slightly above our expectations in the fourth quarter due to higher bonus accruals linked to our performance. Adjusted EBITDA increased 39% year-over-year to another all-time record 14.7 million compared to 10.6 million a year ago. Fourth quarter adjusted EBITDA margin was 42% up from 32% in the year-ago period. Adjusted net income for the fourth quarter of 2024 rose 41% to 12.2 million while adjusted diluted net income per share increased 59% to 35 cents from 22 cents per share in the fourth quarter of 2023. During this quarter, we revised the way we define adjusted net income to more closely align with adjustments we make to adjusted EBITDA to improve the like-for-like comparability between periods. The cash flow was also a fourth quarter record, 13.2 million compared to 6.5 million in the fourth quarter of last year as a result of the growth in adjusted EBITDA. For the full year 2024, revenue increased 17% to a record 127.2 million as we delivered more than 476,000 NDCs, an increase of 9% over 2020. The revenue increase reflects year-over-year growth of 25% in the UK and Ireland, 104% for other Europe, and 81% for the rest of the world, which more than upset the 9% decline in North American revenue resulting from less launch activity and lower media partnership revenue. Strong growth in casino across all our geographical regions more than upset the decline in North American sports. In 2025, we expect revenue to grow in all geographical regions where we operate, including a return to year-over-year growth in North America. Full-year adjusted EBITDA increased 33% year-over-year to a record 48.7 million. Full-year adjusted EBITDA margins 38% up from 34% in 2023. Free cash flow for 2024 was 41.6 million compared to 23 million in 2023 as a result of the growth in adjusted EBITDA. 85% of our full-year adjusted EBITDA was converted to free cash flow. During 2024, we repurchased approximately 3 million shares at an average price of just about $9.06. In aggregate, we have repurchased 3.3 million shares representing almost 9% of the total outstanding shares at an average price of $9.12. As of December 31st, we have total cash of 13.7 million, and we had 23 million drawn on our credit facility. On January 1st, we made a payment of 70 million in cash and 10 million in stock, or approximately 708,000 shares for the odds holdings acquisition. As a result, we have now drawn down a total of 87 million on our credit facility, and we have approximately 36 million fully diluted shares outstanding. At the end of February, we expanded our credit facility from 100 million to 165 million and also extended the maturity date with a new syndicate of six lenders. This gives us increased flexibility and headroom to continue to pursue both strategic acquisitions when the right opportunities arise and to optimize our capital structure in our pursuit of maximizing shareholder value. Our revenue guidance for 2025 is 170 million to 174 million, with a midpoint representing 35% year-over-year growth. The midpoint for our adjusted EBITDA range of 67 million to 69 million represents 40% year-over-year growth. The midpoints of our ranges comply an adjusted EBITDA margin of 39.5%. As Charles and I have both highlighted, for 2025, we expect a resumption of growth in North America, further global market share gains, over 20% of revenue to come from subscriptions, and strong momentum as we exit 2025. Finally, our guidance does not include contributions from any new acquisitions or any new market launches. While we do expect Missouri to launch sports betting in the second half of this year, as per our policy, we will not include it in guidance until the launch date is confirmed. We expect full-year incremental adjusted EBITDA of about 14.5 million from all solvents. And our guidance assumes an average year to use the exchange rate of 107 for the year. Operator, we can now turn the call over for questions.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Ryan Siegel with Craig Callum Capital Group. Please proceed.

Hey, good day. Charles Elias, Pete. I hate to beat a dead horse here every quarter, but it's a recurring theme that I do want to start with as you guys continue to put up really, really exceptional results across the board, outperform, a lot of opportunities, etc. And then we listen to your peers and everyone else and the houses are on fire and etc. What are you hearing from your customers? I know iGaming is better than sports from a customer acquisition standpoint. High intent users remain the focus. But I guess, are you hearing anything different in your negotiations, in your commercial contracts, in your price discussions, et cetera, just to try and reset kind of how you guys are doing relative to the industry?

Hey, Ryan. I think that's a dead horse we're happy to keep on beating. Look, with these businesses, it's really about supply of traffic. You know, that's kind of the big driver of these businesses. Selling the traffic, you know, you can be, you know, some companies are better at selling it than others, for sure. But by and large, you know, the operators are going to buy the traffic and pay a reasonable price if you have the traffic in the first place. But it's, you know, so when I think about the competitors and the difference in 2024. Entering 2024, we tried to telegraph very clearly in advance that it was going to be a challenging year for sports betting in North America, given the launch-driven performance in 2023. I think the competitors just didn't necessarily fully appreciate that as much as we did. Because we saw that coming, it gave us conviction to focus elsewhere during the year, and that opened the door for us, and maybe other competitors weren't thinking along these lines, but it opened the door for us to do the 3Bets.com deal, which, of course, has been hugely accretive for shareholders and a big success. Nope. with that deal where we bolstered our already industry market position in the UK for a casino, added on meaningful European sports betting revenue, and supercharged our casino business in the rest of Europe. The other headwinds for the industry have been, yeah, there's been a couple of kind of basket case markets recently. The one that certainly comes to mind first is Brazil. A lot of affiliates have built or have built very successful lucrative businesses in Brazil. But it was all, you know, pre-regulation. When the market actually regulates, the rules change. People start paying taxes. You know, it's Brazil, so there's quite a few taxes. It's not your gaming duty, but, you know, they want you to run it through a Brazilian entity or pay withholding tax, so the taxes add up quickly. And, you know, we run this business for decades. free cash flow generation. You know, we focus and we talk a lot about adjusted EBITDA, but our ability to convert adjusted EBITDA to free cash flow is incredible. And, you know, Brazil just never had the market dynamics that we thought were particularly attractive, and we are very pleased with our deliberate wait-and-see approach to Brazil. You know, I think Brazil will be fine in time, but, you know, if you had a big Brazil business, you've now got some really hard costs that you need to work through, and In the long run, it'll all be absolutely fine, but it's certainly a short, medium-term headwind for some authorities.

Very helpful. Thanks, Charles. For my follow-up question, you mentioned optic odds, the B2B opportunity within odds holdings and the preparative marks, but curious what you're hearing from a feedback from your Sportsbook customers, and then kind of specifically U.S. versus international there and where you're maybe gaining a little more traction?

Sure. So on the Opticot side, you know, the founders of the business, the team, you know, they're based in the States, right? So they initially sold it to U.S. operators and focused on U.S. sports. And, you know, the kind of big thesis here is, okay, we can – we've got this long list of international operators that, We can sell this to, you know, let's take this thing into Europe and further afield. You know, kind of joking with them that there's more operators within a block of our office in Malta than there probably is in, you know, all of the United States. We're well on the way. You know, it's only been, you know, 80, 90 days since we closed the deal that the top brass at at Opticogs are on the ground in Malta right now working out of our flagship office there and running through our list of clients. So, it's not going to all happen overnight, but we are, as we had said, extremely positive about the combination of our international operator relationships in there. They're products which solve such an obvious and clear problem for operators. On the off-the-cuff side, the use case is really risk management. If you're going to go trade bonds on Wall Street, you're going to have a Bloomberg terminal, and you're not going to trade bonds unless you understand where the market's at. Otherwise, you're going to get taken to the cleaners, and it's no different for sports betting companies. You know, we're going to offer a market in any given thing and even know where the peers are at and to just do basic risk management. And that's what they get with this Opticals product.

Excellent. Thanks, guys. Good luck.

Our next question is from Jeff Santel with Stifo. Please proceed.

Hey. Good morning, Charles Ellis. Thanks for taking our questions. Maybe starting out on guidance, can you just help us think about some of the nuances to growth by region that feed into that consolidated number? I think you called out a reversion back to growth in North America. But, you know, if you kind of strip out odds, Jim, you know, I would assume that that market shows the lowest growth. But just anything on sort of, you know, the relative growth. you know, by region that's embedded in the guidance. And then from a quarterly cadence perspective, how should we think about seasonality this year, you know, given the M&A, given the increasing U.S. weighting and some of the residual state expansion comps that you called out earlier in the prepared remarks?

Thanks. Hey, Jeff. So, following the acquisition of OBSRAM and OptiGuides, you know, the product mix for 2025, It's going to look a bit different, and that obviously has a lot to do with growth. So, you know, we expect to have over 20% of our revenue to come from consumer and enterprise subscriptions, including Rotowire. And that will, of course, drive growth primarily in North America. In terms of, you know, the rest of the business, the marketing business, we will build upon a very successful 2024 in our international markets. and globally within iGaming as we expect to see that international growth continue. And we expect to see a return to growth in North American sports betting. The North American sports betting affiliate plus all the odds businesses plus growth with Rotowire, we expect that North America will be the fastest growing region overall this year. But one thing to kind of bear in mind when you look at the full year guidance and try to understand how to growth dynamics are playing out is that an important driver of the business this year will be a change in traffic source mix, okay, because we're going to have substantially lower amounts of traffic from media partnerships. That is a headwind to overall revenue growth, but it results in a much higher gross margins flowing through to adjusted EBITDA. and ultimately free cash flow. So it puts us in a substantially healthier position overall. We expect the marketing business to be fueled by more traffic and more MVCs. And, you know, our model assumptions for this year is assumed essentially flat pricing dynamics. So as usual, the growth is driven by more traffic, more MVCs.

That's right. Thanks for that, Charles. And then for My follow-up, turning over to capital allocation. I'm curious just how you're thinking about the relative return on repurchases at these levels, given the stock has round-tripped a bit here over the past month or so. You know, the Ozzjam acquisition relative to starting to pay down something like you said, $87 million on the revolver. Just anything on sort of how you're weighing capital allocation and the return on repurchases at current levels would be great. Thanks.

Yeah. So, those of you out there that have read every line of our SEC filings might have noticed that in the credit facility agreement, it does or it did prohibit us from doing buybacks during 2025. We signed that credit facility agreement and then the markets kind of immediately dislocated. So, you know, we were happy to get that signed and closed. We've gone back to the lending syndicate with a request to waive that provision so that we can be in the market this year with buybacks if we want to. And we have received consent for that. So, you know, we have an existing $10 million buyback authorization already in place from the board. And, you know, we will continue to be smart and tactical about it. You know, it's not a means to return capital to shareholders, but, you know, when we think that the stock is completely mispriced and not, you know, not showing signs of improving, we will be happy to intervene.

That's great. Thanks very much.

Our next question is from Barry Jonas with Truist Securities. Please proceed.

Hi, this is Jeremy. I'm for Barry. Thanks for taking our questions. Any updated thoughts in terms of sweepstakes as a potential opportunity and care to comment if you see predictive markets as an opportunity as well?

Yeah. Sweeps is a funny one. You know, it's not exactly the most mainstream products, but it's a product which consumers really want, and it's a product which, at least in some states, seems to have a fairly – clear legal standing. So, you know, those, the operators of sweeps, casinos are very aggressive. They're very happy to buy traffic and they, there's a lot of them. So it does drive up the pricing somewhat, but we continue to take a very kind of cautious approach to the entire category. It's interesting. It's, it is growing, but, you know, we tend to focus on regulated markets and, you know, doing everything by the book. So, we look forward to more clarity in how those products are regarded. In terms of prediction markets, you know, this is an even newer kind of segment, and it's super exciting, right? I mean, this is a clear, strong positive for us, I think, for multiple reasons. The CFTC regulation of the prediction markets is, you know, not clear. But it is, again, a product which people want. And it's basically new competition for state gaming regulators. You know, there hasn't been any sort of federal framework for any gaming-related products. But this kind of is it. And to the extent that this regulation gets clarified in a way that – this can grow quickly. I think it certainly will. And there's a lot of interesting companies, big name companies with big balance sheets that are looking to enter this or already have. And we are talking to all of them. You know, it's an obvious way for us to expand the time and grow the business. So we look forward to seeing how that develops this year.

Great. And then as a follow-up, with multiple states considering higher taxes, what could the potential impact be to gambling.com? And can you share if you've seen any impact from Illinois thus far? Thanks.

Yeah. You know, if they raise taxes, it affects everybody in the ecosystem because it's everybody that comes down. You know, some of these states have tiered those taxes, so it only – most affects the Tier 1 operators and affects the Tier 2 and 3 operators less. our best clients are the tier two and tier three operators. So there hasn't been any tangible impact from Illinois and we'll continue to advocate for sensible taxes.

Thank you.

Our next question is from Clark Lampin with BTIG. Please proceed.

Thanks. Morning, guys. I have two, please. First question, I wanted to follow up on The question that Jeff posed around growth trends, I don't know if this is for Charles or Elias, maybe if you, I guess, both want to weigh in here. If we were to sort of look at it even a little bit more simplistically, we've got a lot to sift through this year in terms of M&A state launches and media partnerships. If you distill it down even a little bit more, what do you think your underlying sort of organic growth rates are going to be in 25 and maybe in 26, if you want to touch on it? enterprise level or geographically? And then the second question, somewhat related to organic growth. I'm curious, if we end up in a situation in the U.S. where the macro environment starts to degrade a little bit, I'm curious, Charles, when you think about the 20 years or so, I guess, that you've been building this business, what have you seen historically in tougher environments in terms of your customer behavior, their player spending and the way that that impacts your business. Does it tend to be more durable and inelastic or do you see periods of significant gyration? Any commentary you could offer there I think would be helpful. Thank you guys.

I'll tackle the first one and then Elliot can talk about organic growth. With the economy, In this growth industry, it's never really had much correlation at all, to be honest. One, it's a high-grade industry, so the industry has just kind of grown through all the economic cycles it's ever seen. But practically speaking, it's not a major purchase, right? You know, if you're going to buy a car or not, interest rates really matter. And you either buy the car or you don't. But, you know, if you spend $100 a month betting on sports, And, you know, things get a bit tight, okay, we spend 80 bucks a month betting on sports. But you still bet on sports. You know, you still can participate in the activity. You just dial it back a bit. So historically the industry has been incredibly resilient in the face of any sort of economic distress, and I can't imagine it will be any different this time.

So if we move over to the organic growth, If you look at our guidance and aggregate regarding towards 35% top line growth, obviously, a lot of proportion of that will come from oxygen. We've said that we expect about 14.5 million of incremental EBITDA from that acquisition. I think we told the street. at the time of acquisition that we have, we expect contribution margins in around the 50% mark from that. So that you can then disaggregate that about 29, 30 million of that revenue would come from the old solving businesses. The remainder growth will come from our marketing business. And that would indicate organic growth in the low teens. that consists of pretty strong growth or very strong growth from our owned and operated websites partly offset by a decline in our traffic from lower margin media publishers.

Thank you very much.

Our next question is from Chad Bateman with Macquarie. Please proceed.

Hi, good morning, Charles and Elias. Nice quarter and happy March Madness. Wanted to start with just AI as a broader theme. I guess as a pro and a con, can you kind of talk about internally, you know, what you guys are doing with AI to improve your performance marketing offering to help create, you know, a bigger moat, bigger business? And then from a competition standpoint, have you seen anything in the past couple months whether it's competition or maybe something that we talked about earlier in 24 with some of the Google changes, maybe some other items that could pose as a threat. Thanks.

Hey, Chad. Sincere apologies for scheduling the earnings call right in the middle of the first batch of games. We'll try to schedule it a little better next year, and good luck with all your bets. In terms of artificial intelligence internally, It has been a boon across the organization, and it is our theme for 2025. We've got a two-day AI-only hackathon coming up, and the best ideas coming that are going to be investigated on that are really amazing. You know, my background as a technologist and that's been instrumental here is I've set the culture of the company to be, you know, an early adopter of these new tools. It's benefiting us in a ton of different ways, not just the obvious areas like technology, architecture, and software development. It really touches the whole business from content to even finance and HR see gains with this. Fundamentally, it's increased our capacity and our throughput on everything. which has given us a license to be more ambitious across the organization in terms of the number of new projects, new products that we want to develop. If you think about artificial intelligence from an external perspective, as you can see from our numbers, our core marketing business, which is powered by natural search traffic, continues to grow and just had a record quarter. Furthermore, if you look at Google's revenue and the number of search queries that are still going to Google, also never higher. So it's a pretty clear sign that the next wave of engagement on these AI-powered experiences is fundamentally incremental to search and not a replacement. But at the same time, I'm sure everybody has examples of how They've moved some use cases away from Google to, you know, these AI tools and LLMs. But from our perspective, the high intent search traffic, you know, the most valuable commercial search traffic has kind of been the least affected by these AI powered experiences. And we're not getting traffic from these AI powered experiences. You know, we get referrals from all of them. It's small, but it's growing rapidly. You know, the chart is beautiful. And the users of these AI experiences are highly qualified. You know, they're pre-sold. They've done a lot of work. They've taken the time to engage in LLM to talk about something complex. So by the time they get to our site, they're ready to go. And what we're seeing, you know, again, small numbers, but what we're seeing is is that these people are even more valuable than the high-intent search traffic coming off of Google. You know, when you get, when we get traffic from an LLM, it's usually it's a citation, right? You know, so they put some information, then we publish them to the answer, and then they cite us. But they only ever cite one or two sites. You know, it's not like Google where there's 10. So that really plays to our advantage as the owners of the biggest brands in the space. And I think it's going to be really hard for the small affiliates and the kind of long-tail affiliates. You know, there's not going to be – or you could maybe make a little bit of money and position eight or nine on Google. Like, that's already hard now, and I think that's getting harder. So, you know, it gives us a lot of confidence that we'll be positioned as a winner in this new future of, you know, incremental AI use by consumers online.

That's great. Thanks for that. And then just a quick clarification. I know sports is a smaller percentage of your overall business, but in Q4, in the items that you talked about in terms of why the revenues were down year over year, you didn't mention anything around hold. So just wanted to kind of circle back on how hold affects your business. It doesn't sound like you're going to see swings Either way, I guess in the fourth quarter it was a slight negative for some of your partners, but it's certainly something that they're focusing on in 25 to increase hold. So can you just remind us how that kind of feeds into, you know, some of the rev shared deals and if that impacted Q4 and then more importantly in 25, if that could help the sports line. Thank you.

So those whole percentages, naturally, they only affect revenue share revenue. And we, you know, our proportion of revenue share revenue has been going up. It went up meaningfully when we did the FreeBest.com acquisition. But the amount of revenue share revenue we have in sports betting, you know, a lot of it's casino, right? So the amount we have in sports betting is huge. not huge and it's not, you know, it's spread out between Europe and the U.S. So, if you have kind of negative operator whole dynamics in one, you don't have it on like a global basis. You might have it in Europe or the U.S., but it typically doesn't happen in both at the same time.

Thank you very much, guys.

Our next question is from Mike Hickey with the Benchmark Company. Please proceed.

Hey, Charles, Elias here. Congrats, guys, on 24. Nice to see the strong 25 guide and great to hear you can buy back stock here. I guess, Charles, on your odds holdings, congratulations. I don't think we've talked live on it. Just curious how the integration is proceeding for you guys. Obviously, I think the team there is strong and sort of the synergies, I guess, that you see. And it's specifically... if you can share some of your ideas on how you plan to monetize the ODDS data engine would be great and have a follow-up question.

Hey, Mike. Welcome to your first GAN earnings call. Yeah, so as I said, we're only about 90 days in at this point. It's still early days, but, you know, they have an incredible team and a fantastic platform. You know, we've integrated their ODDS data into a number of our existing sports betting products, you know, across our engine-operated websites. We've got OZ widgets, you know, OZ driven content all over the place, right? And, you know, now that we own the company that has the single best OZ data in the world, obviously we're going to use that to power those internal tools. So that's obviously been very, very positive. It's also helped us accelerate the development of some new features and tools for our own and operated websites, you know, stuff like Same Game Parlay, content, which, you know, we were doing pre-OBS holdings, but, you know, with their knowledge, data, everything else that they're bringing in, you know, we can certainly do that faster. You know, so, you know, these are growth businesses, and you'd, of course, expect to see the number of clients and the number of subscribers grow on a year-to-year basis, and that's obviously what's happening. But what has been interesting that we've, you know, seen just here in the very beginning is that the average revenue per user on both the B2C OpsGen business and the average revenue per client on the Optic Ops B2B side is also up year on year.

Nice. Sounds good. Thanks, Charles. I guess on Missouri. not in your guidance, so you're sort of baking in upside there, which is nice. Can you help sort of, as much as you can, help us sort of size that opportunity there? If not, I understand, but it would be great to sort of better understand the growth that you think could come from Missouri, given obviously we don't know when it's exactly going to go live, but I think we're getting a better idea. And then as you sort of think – You know, you probably get this question all the time, but you think medium term in the U.S. and iGaming regulation, it just seems like we came into this year with, you know, a lot of hope and confidence that we would have a tailwind here on legalization. And it seems like it's sort of just been grinding away here. I don't know if we're in a better place or worse at this point, but sort of here is your enthusiasm here. We start to look at 26 and beyond in terms of iGaming legalization in the U.S. And if you think there's some big unlocks for you that are sort of believable, I guess, in the medium term.

Thanks, guys. Yeah, the activity thus far this year has been mixed. I think we will get a handful of things still. The legislative sessions are not over, and there's still some big opportunities out there. in play. I think there's an iGaming build file in the last 24 hours. So we remain optimistic that we'll get something this year. In terms of Missouri, we, reading the tea leaves, I think they'll probably get it live by football season. That's certainly the hope, and that obviously makes a difference for everyone, including that they're going to get. So, fingers crossed for that. And as we said 10 times today, it will only go in the guidance once we have clarity on that date.

All right, guys. Thank you. Good luck.

As a reminder, it is star 1 on your telephone keypad if you would like to ask a question. Our next question is from David Katz with Jefferies. Please proceed.

Hi, morning, everybody. Thanks for taking my question. I wanted to go back to a couple things that you talked about earlier, Charles. One is the prediction markets. You know, I wanted to – you were pretty definitive about it, and I wanted to ask if you sort of view that as incremental to the TAM, you know, cannibalizing to the TAM. You know, you seem to have sort of a – I guess, affirming view on those. And I'm curious how you sort of see them in the landscape of your current set of operator clients.

Hey, David. Yeah, I think it's net incremental to the TAM, right? I mean, it could cut into the traditional local state-based regulated sports betting operations. But I think it'll be bigger than, you know, it'll grow the market more than it will impact them. Obviously, different, completely different taxation profile. So when you think about money at the end of the day, more of it could flow through these CFTC markets versus, you know, very highly regulated, very heavily taxed state gaining revenue. And I think, you know, the big operators in the United States, they understand that, right? You know, why would they... Why would they not put it through that channel if they could? And it was legal, right? So, you know, I think this is going to be a fascinating space to watch. I think competition from a regulatory perspective is good. And I'm positive about it. But it's, you know, we're at the beginning of this whole thing.

Understood. And then, you know, second, just taking a lot of your commentary about AI, you know, a number of the operators obviously spend time talking about responsible gaming. and AI as a tool in that regard. Is there potentially a role for you to play in, you know, aiding operators, you know, from that perspective as well?

Great question. You know, most of, we don't tend to get obviously we don't have as much player data as the operators do, right? They're not our customers. And in many cases, we're just sending traffic in and we don't know anything about that traffic. So we're not as well positioned to identify problem gambling as the operators. But we are certainly here to help if they think there's any data points in our ecosystem that could be added into their machine learning model and recognize those patterns of problem gambling behavior and and intervene more quickly with those players.

Thanks. Congrats on your quarter.

There are no further questions at this time. I would like to turn the call back over to management for closing comments.

Thanks, everybody, for joining us today. Please enjoy March Madness, and we'll catch up with you in May.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.