Gambling.com Group Limited

IFRS financial measures as 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 Investors tab of our website. I'll now turn the call over to Charles.

Thank you, Pete. Good afternoon, and thanks

for joining our call today. We generated record second quarter revenue and adjusted to EBITDA with revenue rising 30 percent and adjusted to EBITDA increasing 22 percent -over-year. Our marketing business generated all-time highs for second quarter revenue, and it grows in our sports data business accelerated to where it's highly visible and high margin recurring subscription revenue accounted for 25 percent of total revenue despite the second quarter being the seasonally slowest quarter. These results provide clear evidence that even while we continue to deliver high growth quarter after quarter, we are also rapidly diversifying our business to include a broader suite of products which serve a much larger addressable market. Diversification of traffic sources and revenue models is front and line for our team. In the past four years as a public company, we have multiplied both our traffic sources and our means to monetize that traffic and our growing audience. The business today is a varied matrix of relationships between traffic sources and businesses based CRM platform at its center. To achieve this, we have embraced an omnichannel approach to engage high intent users across the internet including with apps, email, social media, YouTube, communities, and paid media. We've also broadened our ability to monetize our end users and B2B online gambling operator clients with the addition of new business models through the acquisition of Rottelwire, Oddjam, and OpticOdds and will continue to do so when we close on Spotlight.Vegas on September 1st. Our focus on diversification also includes diversifying our -to-market approach within our marketing business as traditional search is becoming less central to our digital marketing strategy. While the development of these other marketing channels like apps, email, social media, and paid media is still relatively early, the contributions are growing rapidly to the point that they are now more evident in our results. We are measuring the growth in these non-search channels in terms of orders of magnitude, not incremental percentages. Generally speaking, these channels have shorter investment cycles while still offering attractive RLi. Having said all of this, the search marketing channel continues to drive significant revenue and cash flow for both Google and publishers. While we expect the channel's relative proportion to other digital channels to fall, we also expect it to intertwine with next-generation AI tools to remain the primary digital channel for years to come. We are confident that this combined channel will continue to drive strong traffic, revenue, and cash flow for our business over the near and long term. While AI tools are capable of making recommendations, they base those recommendations off of data from specialist websites such as our own and link back to their sources. AI tools and agents are perfect for outsourcing tasks people want to avoid, such as booking a meeting. But when users evaluate online gambling sites for their next adventure, it is entertainment, not work. For example, users like to demo an online slot machine before depositing and planning for real money. Users also want to retain a sense of agency themselves to control the decisions which have a financial impact on them. I think it is fair to say that the AI-driven changes to search have had a relatively smaller impact on the online gambling industry than other industries based on our results and what we are reading elsewhere. Our strategy to develop big brands with industry-leading authority like gambling.com, bookies.com, and casinos.com is fundamental to our dominance of traditional search and likewise ideally positions us to capture and monetize high intent traffic wherever it is on the internet, including from next generation AI tools. As the search experience continues to evolve, we are doing what we have always done, making sure that we optimize our offerings so that they create the most value for consumers looking for information about online gambling and for operators that will always need new players. The skills and processes we have perfected for SEO are exactly what is required to optimize for inclusion in generative AI. Those are fundamentally premised on the same signals of high authority, trust, and expertise, our key differentiating strengths. Turning to another key component of our diversification, growth in our sports data services business accelerated in Q2 with optic odds leading the way with 120% -on-year growth. Given the momentum this business is already achieving to date and our realization that the tan for this business may be bigger than originally expected due to the wide variety of clients interested in the data, we continue to revive up our long-term growth expectations. Between odds jam, optic odds, and the refreshed rotor wire, our vision to establish a strong sports data services business within GAM is now a reality. That was the hard part, and we are continuing to scale this business, delivering substantial high margin recurring subscription revenue growth. Our success with quickly integrating and scaling odds jam and optic odds, which follows the success of our free best.com acquisition last year, continues to demonstrate our ability to identify, close, and integrate strategic but creative acquisitions in a capital efficient manner. In each of our prior transactions, including rotor wire and bonus finder, our team's execution has successfully lowered the initial purchase multiple. We expect the acquisition of spotlight.vegas will continue our run of capital efficient and successful acquisitions. Spotlight helps consumers access gambling adjacent entertainment experiences, such as live events and local attractions through its online booking platform. Today the business serves the Las Vegas market with more than 40 clients, including entertainment venues and land-based casinos. Visitors to Las Vegas utilize spotlight as a one-stop shop for services that include tickets to shows and attractions or for booking a hotel. This strategic acquisition expands our client base to now include land-based operators and gives us yet another lever to monetize our audience. Having sold over $30 million worth of tickets in 2024, spotlight already has attractive sales today. As we begin to work with our team, we are confident that for 2026, our digital marketing expertise will enhance margins and improve cash flow. Looking a little further out, we see opportunities to deploy this booking platform on our earned and operated sites, in particular on casinos.com, to ultimately expand beyond Las Vegas and serve regional casinos and other attractions and hospitality providers. At this exact moment, Las Vegas hotel occupancy is at a low. The people that know the market best have seen many cycles come and go and expect the city to bounce back from this one as it has always done.

For us,

this makes the current moment an opportunistic time to make a capital-efficient play on the market with a relatively small upfront investment and substantial long-term upside potential. With this new platform, the accelerating growth of our sports data services business, and our continued industry-leading marketing business, we have transformed the company from an affiliate marketing business into a multi-platform integrated marketing, data, and -to-be ticketing services business, all while maintaining a strong balance sheet and attractive capital structure through continuously strong cash generation, capital-efficient M&A, and well-timed share buybacks. I'll now turn the call over to Elias to review the second quarter's financial highlights. Thank you, Charles.

Second quarter revenue grew 30 percent -over-year to a Q2 record of 39.6 million. Our marketing business grew 3 percent as we delivered more than 108,000 MBCs to our customers in line with the year-ago period. Our marketing business grew in all of the regions where we were at except for North America, where we had tough comparables with the year-ago period, including the tailwind from the launch of sports betting in North Carolina. Our sports data services revenue quadrupled to 10 million. Subscription revenue increased to 25 percent of total revenue. Inclusive of revenue share arrangements in our marketing business, recurring revenue was 51 percent total second quarter revenue. Gross profit increased 27 percent -over-year to 36.9 million. Cost of sales of 2.7 million, comparison cost of sales of 1.4 million in the year-ago period, reflecting costs associated with our successful strategy to diversify traffic sources, as well as cost of sales related to the acquired odds-jam and opticals businesses. Gross profit margin was 93.2 percent compared to 95.3 percent in the year-ago period. Operating expenses of 61.3 million included 23.8 million of charges related to the odds holding acquisition, of which that value movement is related to the outperformance of odds-jam and opticals of 21.2 million. Non-cash amortization of acquired intangible assets of 2.2 million and other acquisition related costs of 0.4 million. Adjusted EBITDA increased 22 percent -over-year to a second quarter record of 13.7 million, and adjusted EBITDA margin was 35 percent compared to 37 percent in the year-ago period. Adjusted net income for the second quarter rose 37 percent from the year-ago period to 13.4 million. Adjusted net income continued to be positively affected by translation effects relating to the strengthening of the euro versus the US dollar when translating balance sheet items at quarter end. Adjusted diluted net income per share increased 42 percent from the year-ago period to 37 cents. Free cash flow grew 36 percent to 8.2 million, reflecting strong cash conversion and adjusted EBITDA growth partly offset by tax payments of 5.5 million, of which 3.3 million was related to the odds holding acquisition. As of June 30th, we had total cash of 18.7 million and 70.5 million on palm drawn capacity on our payment of 11.2 million for FreeBets.com using cash balances. In total, we have drawn 94.5 million on our 165 million credit facility. Effective April 1st, we entered into swap agreement to effectively convert 75 percent of US dollar borrowings to euro borrowings, lowering our cost of debt capital by approximately 200 basis points. The swap transaction also aligned our functional currency with our borrowings, eliminating the corresponding forced translation effects in our income statements moving forward. We continue to generate strong free cash flow. Based on the closing price of the shares this afternoon, we expect free cash flow yield to be double digits prior to the effects of any further share purchases we may make in the second half of the year. Our free cash flow together with our strong balance sheet and un-drawn credit facilities continues to provide the flexibility to pursue both acquisitions and share buybacks to optimize our capital structure and maximize shareholder value. Today, our board approved a 10 million expansion to a total of 20 million of capacity in our current share repurchase program, none of which has been utilized yet. This afternoon, we adjusted our full year guidance to reflect revenue range of 171 million to 175 million and then adjusted it to that range of 62 million to 64 million. The increase to the full year revenue range reflects the expected four months of contribution from Spotlight.Vegas and the launch of sports betting in Missouri in December, partly offset by currently weaker search rankings following the most recent Google core algorithm updates. Adapting to Google's algorithm changes its business as usual and we're on the way to recover lost positions. The midpoint of the revenue guidance of 173 million represents 36% of the -over-year growth. The updated full year adjusted EBITDA guidance range reflects the higher cost of sales in our marketing business as a result of the higher proportion of non-FCO marketing revenue. Statistic investments include the new digital marketing channels and monetization models that Charles highlighted and no adjusted EBITDA contributions from Spotlight.Vegas for this year. The midpoint of the adjusted EBITDA guidance reflects 29% -over-year growth. Our guidance assumes an average year to use the exchange rate of 1.15 per year. As Charles highlighted, the acquisition of Spotlight.Vegas provides another strategic lever to engage our high intent

audiences.

In

a capital efficient

manner, we limited upfront cash outflow and a pay for performance structure that will be accretive to our operating results. For 2026, we expect Spotlight.Vegas to generate net revenue of at least 8 million and incremental adjusted EBITDA of at least 1.4 million. Operator, we will now turn the call over for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Again, that is star one to ask a question. And our first question will come from Jeff Stanchel with Stiefel.

Good afternoon, Charles. Thanks for taking our questions. Maybe let's start off if we can on a Spotlight.Vegas transaction. Can you just provide us with some of the metrics underlying the earn out compensation and then more high level? Charles, I'm curious, as you underwrote this transaction, how did you come to understand the similarities and the differences in the user journey for live events versus your legacy online gambling focused and as a corollary to that, what really gave you the confidence that your tech and experience would translate well over the live event space?

Thanks. If I could have the first part of that question, as we managed the intent here is to be very capital efficient and other limited upfront payment and pay for performance. Essentially, we have an upfront payment of eight million, which we expect to settle in cash. And then we have a two year earn out components that is capped at an additional 22 million, so 11 million per year based on incremental EBITDA above a certain threshold for each of 2026 and 2027. And the multiple amount is 6X operating profit.

From my perspective, it was a very attractive acquisition. I don't think any of our competitors were looking at this. It does involve a little bit of original thinking. We're looking for ways to monetize this audience we have and deploy the tools we have. This is a perfect opportunity to do both. We have this incredible audience of people that want to gamble, that love gambling, whether it's online or landless. These people visit Las Vegas. When you look at the spotlight business, there's not a million different ways to do digital marketing within the online gambling industry. We wouldn't have gone all the way to do full blown ticketing outside of gaming. That's a step too far. But ticketing within gaming that's gaming adjacent, there's some synergy there. When we look at this particular business, it's still a relatively young business. There's a lot of things that our team can go in and do immediately to make a difference. It reminds us a lot of the FreeBest.com acquisition. Those assets were not operated as well as they could have been. It was our team that was able to unlock that value. Last but not least, it's always about people. We've got a great team over there and a very strong leader, Doug, which we very much look forward to working with. I think us combining our digital marketing skills with the technology platform that they have already, it exists, and then they don't have to build it. It's a very clear way to grow that business and do it under our roof.

That's great. Thank you for all that, Caller. Then maybe shifting gears and turning over to A.I. Charles, some helpful commentary at the beginning of the call. I think we're all grappling with figuring out how this looks and evolves and over the long term impacts your business. A bit of a two-parter question here. First, I'm curious if you've done any work or seen anything in terms of sort of clicks through rates for a typical high-intent A.I. search and how that frames up against legacy search. Then second, how do you think about the potential for market share consolidation for traffic source through A.I. searches and how you're positioned to be one of those one, two, three sites that is ultimately sourced by the main A.I. engines for a typical gambling search? That's all from us. Thanks.

Yeah. Look, when Google or any other search engine puts an A.I. overview at the top of the search engine results page, obviously fewer clicks make it through to the stuff below that. That shouldn't surprise anyone. In terms of market share, share of voice is probably a better way to put that in terms of these different A.I. agents, LLMs. If you have a Google search you've got, at least you used to have 10 results. Now it can be less, but it was a longer list than what you would get from an A.I. tool. On an A.I. tool you're going to get two or three, unless you specifically ask it for more. You really have to be positioned to the extent there are positions on these general A.I. tools. You need to be positioned kind of one, two. The only way you're going to get there is to have industry-leading authority, which of course is what we've been trying to build for the past 20 years with Gammagot.com, Logiz.com, Casinos.com. We have invested in big brands to rise above the fray and be the obvious go-to source for information on this industry. Our early indications show that we've got a very high share of voice on these new tools. Of course it's growing very rapidly for us. It didn't exist a few years ago, so the growth rates are basically in tinnity. It's going to be a big part of the future of the business.

That's great. Thank you very much. I'll pass it on.

Our next question comes from Ryan Sitdahl with Craig Hallam Capital Group.

Hey guys. I want to go to the Google algorithm update. When I look at the guidance, it looks like EBITDA cut by five million in the back half of the year, despite some good guys layering in there as well with acquisitions in Missouri and FX and so on. I'm curious when exactly that happened, what you've seen since that, and then if you're willing to quantify the other components and assumptions within guidance of the Missouri launch, how much that's contributing.

I'm happy to speak to that and give you some color on guidance for the rest of the year. The latest Google algorithm update rolled out in the last 30, 45 days squarely within Q3. It is a reminder that this stuff still matters and search rankings are still a fundamental part of digital marketing. In terms of revenue for the second half of the year, our increase of a million at the midpoint for revenue guidance until the small bit of additional revenue from Spotlight at Vegas, but the main drivers of the change in revenue expectations are an upward revision of sports data services revenue and a downward revision of the traditional search revenue due to the search rankings we've discussed. That's partly offset by an increase in revenue from all the other non-SEO channels. In terms of the adjusted EBITDA, the higher proportion of revenue from non-SEO sources drives higher cost of sales. We don't expect any meaningful contribution to adjusted EBITDA from Spotlight at Vegas until next year. We have also decided to accelerate investments into these non-SEO channels as well as a very exciting, entirely new project which is outside of anything we do today which will drive further diversification and growth in 2026 and beyond. Everybody only bluffs to kind of opine or get our opinion on pricing and operators and demand and you know that remains as is. Okay, so when you look at these, when you look at the margins coming down, it's entirely due to mix shift. I really want to stress that it's not margin compression per se, our ability to monetize and it depends on the clients hasn't changed in any way, the margin profile of any given channel hasn't changed, it's just that the channel mix is changing.

That's helpful, thanks Charles. Then just on Spotlight.Vegas, can you give, however you want to quantify it, but anything from the past few years from a financial standpoint, I guess, was it growing and was it profitable and just to put the 2026 estimates a little more context around it?

Yeah, if you look at 2024, it was growing nicely. It did over 30 million in platform turnover with and it was profitable. It's a lower margin business at this scale, but as it scales, it's quite quickly gross net margin revenues. At the moment and our expectations of 2025 is that it's roughly breakeven and that has to do with the micro environment in Vegas. We expect together with a little bit of a rebound and seasonal strength and a little bit more efficient marketing when we get our hands on that. We're guiding towards 8 million on Metro Avenue and 1.4 million of incremental adjusted to that for 2026.

Thanks,

Elias. Good luck,

guys. Moving on to Barry Jonas with Truist Securities.

Hey, guys. Appreciate the call you just gave on the EVA-DOT guidance change for 2025, but maybe wanted to dig in in another way. I know you haven't guided 26 yet, but can you talk about how 26 looks relative to your view 90 days ago given all the changes we're seeing now and maybe if you can't talk quantitatively, maybe just qualitatively? Thank you.

Yeah. Hey, Barry, happy to touch on that. I think we get these search rankings back. That brings back up the natural search revenue, but I think overall we are seeing the effects of AI on search and our expectations for search revenue going forward are not what they were in the past. Having said that, we are making a lot of progress on scaling up all these other channels, stuff that we kind of purposefully didn't do in the past to keep all our focus on SEO, but now we've got this kind of extra bandwidth that we're not going all in on SEO. We can deploy some of our best people on scaling up apps, email, paid media, et cetera. As you can see in our results today, it's making a difference and it helps us hit the numbers for Q2. When I think about next year, it's just going to be less about search, but these other channels will scale meaningfully. I think on the revenue side, it's a different margin profile, so you have to kind of bear that in mind. SEO is always kind of the highest margin, but we'll see healthy revenue growth from those other channels and it won't flow through quite as well to the bottom line as natural search has done for years, but it'll still absolutely be profitable. When you pair it together with all the different ways we have to monetize the audience, we'll be in the best position of anyone to monetize people interested in online gambling.

Got it. That's helpful. Then in the past, you've talked a bit about prediction markets in terms of opportunities there. Curious if any updated thoughts there in terms of search, maybe also from the data or other avenues for revenue there. Thank you.

Yeah. We've been spending a lot of time looking at prediction markets. It's a fascinating category. I really like it. It's not a big driver of our business yet, but I think it very well could be in a couple of years. I think these lawsuits are going to go to the Supreme Court and you're going to have another PASPA-like decision which could throw the doors open and really create the next chapter of growth for the whole industry in North America. I'd like to speak up for the player. So much that's written about this industry is about the regulators, the operators, the businesses, obviously. At the end of the day, somebody needs to advocate for the player. Maybe that role falls to me because I don't think too many people in the US are doing it. If you look at the state of study in the United States, it ain't great. You don't have full access to these products in different states. You've got a ton of states with preposterous tax rates. That gets passed on to the consumer. You've got states with single operator monopolies. How outrageous is that? That is so anti-consumer. It's kind of shocking that that exists. So when you look at the traditional gaming regulation model, state-based regulators, state-based legislation, I don't want to say anything bad about any of these people and I wouldn't. These are very serious, hard-working people doing their best to implement the laws that have been created. But at the end of the day, the consumer ain't getting the best deal. And that's why you still see these offshore sites with meaningful market share. And you're starting to see some state AGs actually complain to the DOJ to maybe do something about it, which would be helpful. But then enter prediction markets. This is a completely new way to regulate this industry. It's actually quite sophisticated. They borrow a lot of really smart technology from financial markets, which is objectively more sophisticated in certain senses than what a lot of the operators and regulators are using today. So I think if it's given a proper chance, I think it could be radically more consumer-friendly and be a dramatically better product for end users. So I'm really excited about it. And I hope these core decisions break the law in the right way. And I hope for the American sports better that the legal ambiguity on this category goes away and it becomes a big new thing. Because as somebody who grew up in the States and was frustrated that I couldn't bet on sports, a lot of progress has been made, but the U.S. is still pretty clearly behind most other OECD-developed countries in terms of the availability and competitiveness of these products. So I'm sorry for the rant and very long answer to your simple question. But I think it's a great thing and it should be given a chance. And we'll be watching closely and hoping for the best.

Appreciate all the comments. Thank you.

And moving on to Clark Lampen with VTIG.

Thanks for taking the questions. Good evening, guys. Charles, I guess if we go or focus on the sort of marketing piece of your business, we strip out, I guess, the impact of algo changes. Were you seeing any changes in behavior for sort of your core customers, I guess, whether that's incumbents or sort of challengers in the U.S. from a marketing standpoint, any meaningful changes in sort of mixed allocations to the affiliate channel overall? And then earlier you sort of talked about, I guess, the margin profile of sort of different channels as we're trying to, I guess, sort of think about maybe digest the interplay of search, LLMs and sort of attractions. Has the view of, I guess, the structural margin opportunity or long-run EBITDA generation changed anyway? Nice one.

Yeah, no problem. Hey, Clark. To pick up on the second one, the long-term margin profile, I think, you know, we've been talking for years about 35 to 40 percent. And I think with the new guidance, we're at 36 percent this year. So we're still in that range. Obviously, we're more towards the bottom of the range. But that remains our outlook. You know, we think we can dramatically grow revenue and have a very meaningful contribution to adjust to EBITDA with these other channels just within the search marketing business. Sorry, the marketing business. But, you know, I need to bring you back out of that to the sports data services business and everything else we're doing now, ticketing as of September. That's growing like the weeds. It's a high growth. People love it. They can't get enough of it. That is increasingly the future of this business. And you can't, you know, when we talk about the business overall, you've got to get that part of it. It's air time as well. In terms of mixed allocation from operators, demand, all that, you know, what has changed in the past kind of year or two is, you know, we've seen more and more traffic that we're delivering to our operators go over to them on a revenue share basis. So that's, you know, like for like North American revenue, it does affect the comparability of the figures. If the previous figures were more CPA driven, you know, we are seeing a return on those investments on the rev share is profitable. But that's the only meaningful change, I would say. And that's not a one to two thing. That's just a kind of past

12 months thing. Thank you.

Our next question comes from Chad Bainan with Macquarie.

Hey guys, this is Aaron on for Chad. Thanks for taking the question. Subscriptions are now about a quarter of the business, as you noted. So you've grown that a nice chunk of the business. Is there an opportunity to raise pricing or how do you think about the next steps to further grow this part of the business? Thank you.

Yeah, among all this stuff we're doing, I think growth in the sports data services business, in particular optic odds, is the most straightforward. It's a product people love and need. You know, we've got some new salespeople on the ground, in new markets. There's a couple of product tweaks that need to be made to make it appeal to a broader, to more different types of operators, if you will. But fundamentally, it's the best data that's out there and it's not too terribly difficult to sell. So that's the clearest opportunity, I think, at this stage.

Okay, that sounds good. And then with regard to the RotoWire refresh, I'm just interested to hear how that's going, you know, what's changed and maybe an early read on impact. If you can share that. Thank you. Yeah, so,

you know, we did the refresh in the middle of summer before NFL started, obviously. It's a, it's both a product and brand refresh. The RotoWire numbers are up double digits year on year. We're going to be working through the first half, but we won't really see the full power of the new products and brand until we get through the start of NFL. So tune in in November for the full report on RotoWire.

Okay, got it. Thank you.

Moving on to David Katz with Jeffries.

Hi, afternoon, everybody. Charles, just digesting the acquisition. Can you talk a bit more about what the drivers or success factors are for that business you're requiring? Aside from integration risk, where I think you've proven yourselves already, what drives that business long term? And the overlap versus drivers of the core business where they're different and similar would help. Thank you.

Yeah, it's what I like to call digital fundamentals. So, you know, conversion rates across the board, following that customer journey, optimizing each step of it. And then, of course, marketing efficiency. You know, they do a lot of, you know, they do a fair amount of paid media already, and they have decent tracking on it. And when you look at the numbers, they're actually pretty good. But it could be a lot better. I think, you know, fundamentally, they just have a small team, so they haven't been able to put the pedal to the floor on all the different opportunities that they have. You know, we'll also be able to, of course, bring cash to invest in media as necessary. And there's, you know, in the place of the affiliate business, where, you know, we are not providing the ultimate service or handing the user off to another company to do that. You know, we lose control at some point. And it's always been a bit of a frustrating element of that business to us, because when we hand the user off, okay, you know, we hope that they do a good job of converting them, but they might not. With Spotlight, we own the whole thing, A to Z. So it's only our fault if a user doesn't convert. We can't blame it on anyone else. And having full control of that customer journey allows us to lean in a lot harder and deploy our skills across that full customer journey. You know, there's a lot of things we could do to help our operators improve their conversion rates. But, you know, it's a delicate conversation to go to them, get them to change their landing page, their products. But when we own the whole thing, it's, we can just go and do it.

Thank you. Appreciate it.

Our next question comes from Mike Hickey with the Benchmark Company.

Hey, Charles, LASP. Congratulations, guys, on your Spotlight deal. Just two questions from us. I guess, first topic on AI search disruption. Just curious, Charles, how you sort of assess the pace of natural search traffic decay from these shifts to AI-powered search engines? And if you think you have sort of the runway here to recalibrate your business model, do I set that? Or if there could be, I guess, a more meaningful disruption to your growth profile in the near term? I have a follow-up.

Yeah, I mean, hey, Mike, good. Thanks for the question. If you look at these general AI experiences, they've been around for two, three years. It's not, this isn't new. It's been having an effect for some time. But we think a lot of that effect is, we've already seen, people still need Google search. It's not like it has no utility anymore. Clearly, it's still a useful product. And the AI experiences are using Google search. And what's behind a lot of these AI answers is in the Google search. So, we are very realistic about the future of that channel. We've certainly brought in our expectations meaningfully. But I'm also rather encouraged by our early results and the work the team has done to ramp up traffic from other channels. So, I think we're going to be absolutely fine. There's just a couple quarters here where we redeploy the resources into other channels.

Okay, thanks, Charles. The second question on cost optimization, you've done obviously a number of very successful deals now spotlight joining sort of the portfolio. Do you feel like there's opportunities here to realize cost optimization or operational synergies across the group that could maybe help offset some of the incremental cost pressure on profitability that's surfacing here in 25 and maybe 26?

Charles Yeah,

there's

an enormous amount of cost we could take out of this business and make it incredibly profitable. But we don't want to do that. Because now is not the time to do that. We need to invest in these new channels and build out new capabilities. So, we're leaning into our team. We're still hiring. Nothing's changed on our end. And we see opportunity. And we think we're in capital. So, we are in investment mode at this moment.

David Thank you, guys. Good luck.

Coordinator Moving next to David Bain with Texas Capital Bank.

David Great. Thank you. Just two questions. One, just looking at past algorithm changes from Google, how long did it take you to rebalance previously? And, you know, if this can lead to fair shifts, how this algorithm perhaps changes from different ones in the past? Charles

Yeah,

usually,

you know, one, two, three months sort of thing. We should, you know, have it back. I'd like to say that it's not the positions that we don't have in this particular moment in time have been picked up by operators, not affiliates. There's nothing to read into that. You know, that's business as usual with Google search engine volatility. That does not mean that they're somehow Google now favors them more than affiliates on some kind of long-term basis. It's just how it's working at the moment. So, yeah, we haven't lost, you know, I think on a relative basis, we continue to dramatically outcompete them and our share of voice is, I think, way higher than the next, than the number two player in most of these markets. But, you know, a couple of operators have taken a few positions we have in a few key places. But at the end of the year, I would think we'd have it back.

David Okay, okay. And then, go ahead. Charles Okay. Not at all.

David

And then, my follow-up was just on Optic. You know, are there some kind of KPIs that you believe would be helpful for us to understand that growth a little bit better? I mean, is it number of customers from the individual or operator standpoint, depending on which Optic, or is it, you know, has there been menu choice changes, pricing changes? Anything would be helpful.

Charles Yeah, happy to give you some color there. So, on, you know, it's two different businesses. It's Optic Jam and OpticObs. Optic Jam is the consumer-facing business. OpticObs is the, you know, B2B enterprise business. Optic Jam clients is roughly flat, but the average revenue per user is up meaningfully as they are upselling. They're selling more to the same user base. And then, on the OpticObs side, they're signing out new clients left and right, and they're also quite meaningfully increasing the average revenue per user, or client, shall we say, on that business. So, excited.

David And on that second one, should we sort of think about larger operators with more needs? Are the operator base getting larger from just a number standpoint? Meaning?

Charles It's a mix. One thing that surprised us about this business is it's not all operators, right? I mean, you've got startups, you've got, you know, professional debtors, arbitrageurs, you've got, you know, apps, media companies. There's a lot of people need high-quality odds data. It's not just the operators. But even within the gaming ecosystem and service to the operators, there's the platforms. You know, we can do platform deals and then distribute it into all the operators that are on any given platform. So, yeah, we've signed a number of different interesting deals and, you know, we're, I think the future is very bright for that. You know, when you include RotoWire, you know, we work with multiple members of the MAG7. You know, they come to us for our sports data to power, you know, in part their various offerings, including AI tools.

Right on. Very helpful. Thank you.

And this does conclude our question and answer session. I would like to turn the floor back over to Charles Gillespie for closing comments.

Thanks, everybody, for joining. We look forward to updating you on our Q3 results in November.

Ladies and gentlemen, thank you for your participation. This does conclude today's conference. You may disconnect your lines and have a wonderful day.