Kambi Group plc

This call is being recorded. Your line is muted.

Very welcome to Canby's Q1 2023 report presentation. My name is Nina Nordlander and I am Senior Vice President Investor Relations here. And today we will start to hear our CEO Christian Nylén talking about the quarter followed by our CFO David Kenyon. Thereafter we will have time for questions. So you can either call into us and ask them here. or send them to me through the chat in the web. So once again, very welcome to the presentation and over to you, Christian.

Thank you, Mia. I will talk very briefly about the highlights and then I will hand over to David and then I will come back and talk more about the quarter in depth. So this quarter we are having a very busy sporting calendar with a couple of top events, the playoffs in American football and especially the Super Bowl and the March Madness. I will talk more about that later. But we are very pleased with the product we are able to produce with these top events and with a perfect performance. So that is very pleasing. Revenues per quarter is up 19%. Yeah, as I said, it is a very busy quarter, so we expect this and Q4 to always be the two top quarters on a yearly basis. The major news on this quarter is, of course, the renewals of two of our top operators, Rush and Betplay. These two are... benefiting more than 50% of our underlying GDR in the Americas, who are two very, very important customers to us, and we're very pleased to renew the contract with both of them. And of course, our AI-driven trading has been rolled out across all major leagues in Europe now, and we're very happy about the results so far, and I will talk more about that later. But for now, I hand over to David.

Thanks, Christian. Yeah, let me start with the financial highlights for the quarter. The revenue for the quarter was 44 million, up from 36.9 million this time last year. We benefited from launching new customers, from going to some new states in the US, and of course, from a full quarter revenue from Shape Games. Our costs did increase from 29.5 million to 39.5 million but there's some big reasons for that which I'll get into. Firstly, some structural changes to our P&L. We have additional OPEX from the acquisition of Shape Games, and also the amortization on the acquired intangibles related to that acquisition. Those two alone combine for 3.6 million of that cost increase. We also had certain non-recurring costs in the quarter. Versus last year, we had a movement in FX of 1.3 million, with a half million cost this year and a 0.8 million gain this time last year. We also had personnel restructuring costs of around €1 million. This was actually a headcount reduction in the business of around 30 people. We realized operational efficiencies, which were enabled in large part by our new ALGO initiative, which we talked about recently at the Capital Markets Day. These personnel restructuring savings will ultimately lead to reduced OPEX on those headcounts of more than €2 million per annum. But in this quarter, we saw €1 million one-off cost. This led to EBIT for the quarter of 4.5 million. But we actually introduced a new metric this quarter. It's earnings before interest tax and amortization on acquisitions. And it specifically excludes amortization on the acquired intangibles from our EBIT number to show the underlying performance excluding non-cash acquisition-related entries. And on this basis, We made 5.8 million versus 7.7 million this time last year. Our net cash showed a healthy increase in the quarter, up significantly in the quarter by about 8 million, and I will show that in more detail. But we are down on last year, mainly due to the acquisition we made of Shape Games during the year. But overall, a very healthy balance sheet at the end of Q1. This is the Canby turnover index. It's an aggregation of the entire portfolio, as I show each quarter. The blue columns are an indexed turnover aggregation, so the operated turnover accumulated on an index basis. And the orange line is the operator trading margin across the network. You see that turnover took a small dip after Q4, and that was, as we expected, as a result of the Football World Cup taking place in Q4. is offset to some degree by launching into new states, notably Massachusetts and Ohio. In terms of the sporting season, in early February we saw the culmination of the NFL season, but we saw a significant increase in our basketball turnover, with the college season a big contributor this quarter. We were up 12% versus last year. We're live in four more U.S. states. We saw Kindred relaunch into the Netherlands in July last year. But these boosts to turnover probably offset to some degree by the results of Penn National Gaming, where we've seen in their public data that they've seen a loss of market share in key states, such as Pennsylvania, Illinois, and Pennsylvania. I know they've talked about how they've moved their focus away from cluster acquisition, and that's to some degree shone through in our numbers too. The operator's trading margin for the quarter was 8.2%. versus 8.1% this time last year. Which brings me to the revenue conversion. As I said, we start on the left with 12% operator turnover growth. Relatively small impacts this quarter from the operator margin, which was in line with last year. And the tax and marketing deductibles, also relatively small, as we're now, the vast majority of our business is coming through regulated markets, and that's very steady, up north of 90%. The other column is a little lower than it has been in prior months. We've seen a significant increase in our live data costs specifically, which are recharged through to operators. And these are revenues which are independent of the level of operator turnover. And then on the right-hand side, you see the contribution from Shape Games. It's approximately 3 million euros, and it's, of course, completely new versus this time last year with the acquisition happening in the second half of 2022. All in all, that took us to a 19% growth in revenues. Finally, the cash flow. As I mentioned, very healthy increase during the quarter. We started at 60.7 with our opening cash balance. And that's added to by the operating profits, which I've talked through. Those profits were complemented by an increase in our working capital position with some delayed receipts from operators. Actually, they were due to be paid in Q4, got slightly delayed, and were paid in Q1. But it's obviously helped our cash position now by the end of the quarter here. And we close with a closing cash position of 68.7 million euros. A very healthy position for the balance sheet moving forward. With that, I'm going to pass it back to Christian. Thank you, David.

Yeah, as I started saying, I mean, as usual, Q1 displays a great sporting calendar. Tennis is back and we have just Australian Open. The soccer has a very busy schedule. But the two main events is playoffs in American football and the Super Bowl. And after that, the March Madness. Our product has been great. For the football, we during the playoffs introduced cash out for the bet builder, which we together with Bet365 was the first in the market to offer. And yeah, we tested it a few matches before, and it worked absolutely perfectly during Super Bowl. The Super Bowl itself was the second largest event ever, only beaten by the Super Bowl last year. And it's twice the size of a World Cup final. As you can see on the graph, the 13 playoff games... has a massive contribution to our quarterly results. And now, since early February, there is no more football until September again. So, of course, it has a big impact on the second half of this quarter, but more importantly, in Q2 and Q3. During the quarter, we also have March Madness. which is the college playoffs in basketball, has great interest, especially in the US, of course. And we had a great performance year on year. We were up 17% on turnover. And mainly it was driven by enhancements in the product, such as best builder and more player markets. So I would say we had the best product out there for this tournament. Very pleased with all in all the product enhancements and especially, as I said before, perfect performance for these big events. During the quarter, we also had a few partner signings. Some of them we covered in Q4. So I will highlight only three of them here. First, we have Delago, which is a upstate commercial casino in new york we actually used to power it as part of the drafting deal back in the days and we're pleased to have it back in our portfolio of customers and as it is only four commercial casinos it's a very interesting retail business for us and Together we are supplying Rush, their retail casino, and also having free casinos for Seneca in New York. We have a very dominant market share on the retail sports betting in the state. The second one, Puta Otami, is a partnership with... the largest casino group in Wisconsin. Wisconsin is a state that only have regulated retail and mobile on-premise. So having retail deals is more important in these kind of states, of course. And here we have what I would say the crown jewel of the casinos in the state. We're very close proximity to Milwaukee, the largest city in Wisconsin. And finally, on this slide, we have signed Shape Games has made a partnership with Wager a couple of weeks ago. This is a very interesting partner in itself. But yesterday, Yahoo announced that they were acquiring Wager. So, of course... this partnership becomes much, much more important than it was before. And we are very much looking forward to work together with Yahoo. As usual, during any quarter, we do a lot of live launches. In Q1 this year, we did 20 launches in three new states as well. In Ohio, we completed 11 retail and online launches during the quarter. In Massachusetts, we went live retail just before Super Bowl. And after that, we have also added online in March. And finally, as I talked about, we have launched with Puttawatami in Wisconsin, making Wisconsin the 22nd state we are active in. I would say we are unmatched for market delivery and our customers can always trust us to be among the first in any new market coming up. And we are consistently enabling our customers to be on market on time. We will continuously update you about our development. We've been with five key growth drivers towards our 2027 financial targets, as we presented on Capital Markets Day a few months ago. In Q1, we had good progress on the first three of these drivers, and I will go through each of them now. So firstly, as I started mentioning, we have done significant added extensions to our largest customers, Rush Street and Betplay. These two customers are together roughly 50% or more than 50% of the GDR that we are operating in the Americas. RSI is, of course, very active in the U.S., where they are active in many other states. But they also do business in Canada, Colombia, and Mexico. So I'm very pleased to have extended that contract. Betplay is, of course, the market leader in Colombia. With this extension, they also communicated plans to expand across Latin America further. Talking about Latin America. This is and are very, very important part of our future growth, of course. We are already extremely successful in Colombia. We're doing great movements in Argentina, where we now are live in eight jurisdictions. covering roughly 55% of the population in Argentina. And it's looking really, really good. We have really interesting news about Brazil. The government there seem to have come to a tax rate for the regulation of sports betting in Brazil. And we expect official announcement to come very, very soon in Brazil. Of course, Brazil is a third of America, so it's an extremely important market to get live with. And as I communicated in last quarter, we believe we have one really strong customer in Radio do Pitaco already. And of course, we hope to be able to sign a few more in Brazil over the next few quarters. One point that we have talked quite a lot about lately is, of course, our third-generation trading capability. We are now able, with AI-powered trading, to really make the product much, much better, and we can do it much more efficiently. As I communicated before, we had great success during World Cup, And now during this quarter, we have rolled this out to the top six European domestic leagues and also to the big cup tournaments such as Champions League, Europa League, FA Cup and so forth. We will, of course, continue this rollout with more leagues. But more importantly, we expect to be able to do this on live betting as well in Q3 or Q4. After that, we expect to rule out more sports during the next coming years, giving our operators and their end users a much, much greater product, but also making it possible for us to do it with much greater efficiency. As an example of the impact, in Q1, the turnover on BetBuilder almost doubled year on year because of the better product we could give. So to summarize this quarter, we have extended two of our most important partners in Betplay and Rush Street. We're extremely pleased with that. Our AI-driven trading illustrates a substantial opportunity and I think this is something we're quite unique at and really looking forward to see what we can take it during the next couple of quarters with in-play betting or live betting. So we're doing great progress towards our 2027 targets and looking forward for the rest of the year. Thank you very much.

Thank you, Christian. And thank you, David. Now it's time for questions. So you can either call in to us and ask them directly or you can send them via the chat to me. So, first of all, over to you, operator.

If you wish to ask a question, please dial star 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star 5 again on your telephone keypad. The next question comes from Oscar Ronquist from ABG. Please go ahead.

Thank you. Good morning, Christian, David, and Mia. Thanks for taking my question and apologies in advance. If you need to repeat yourself, I entered a call a bit late. So first, just on... In Arizona, we see Desert Diamond performing quite well. So I just want to get a touch on if you have any evidence of locals starting to grab some market shares in other states that we cannot track. And also... I mean, we have seen the start for Jack Entertainment being on the software side maybe in Ohio, but do you see any clear signs of them ramping up in the coming months after the launch?

Yeah, I mean, yeah, Desert Diamond is doing great. I think we have a few others doing quite good as well. Can't really comment on non-official figures, but... We are in general quite pleased with our local operators. I mean, you can see in our figures as well, but I mean, we're becoming less and less dependent on the large operators in our network. What was the second question? Oh, hi, Jack. Yeah, I can't speak for them, but I think they are still... working out a little bit how to make the most out of it. I think we have started quite carefully, so I definitely hope that they will ramp up during the quarter. Okay, great.

Then on the turnover index growth, you grew 12%, down a little bit from Q4, where you had 20% turnover growth. So I don't know if you've mentioned this and how much you can actually say about this, but in the official numbers at least, it seems like PEN has come down quite steeply in some key states. Can you elaborate on the financial impact for you just from the sequential decrease from PEN and what's the underlying growth if you just exclude the PEN numbers?

To start, I can't really get into exactly what kind of contributes in the quarter. I mean, we just can't go there in terms of our contract. What I can point to is the public data. And, you know, there has been a massive decrease in the market share in key states. I mentioned Pennsylvania, Illinois, Michigan, the three examples. If you look at those numbers, it's been a massive decrease from this time last year, but also kind of continued from Q4 through into Q1. So, yeah. And they've talked about not really focusing on customer acquisition right now. So it has fed through into our numbers. Yes, it's a relatively big factor for us. But yeah, of course, we'll lessen the impact as and when they do leave the network, of course.

All right, thank you. Just the next one. So in the report that you had signed the company called Wager with ShapeGames, So just in terms of the connection to Yahoo, also, I mean, the connection to Yahoo in Great Canadian as well, do you see, like, any other opportunities where you could, like, cross-sell both the Canby platform, some modules, and some other maybe, let's say, if Yahoo wanted to increase their sports betting exposure, would that be sort of a positive read-across to, or upcoming maybe potential signings?

Obviously, we hope so. The Yahoo signing was done yesterday, so we haven't really gathered more information about it yet. But for us, it's a great thing that Shape has made this relationship already with Wager. And as you say, we pro-Great Canadian have a relationship with Apollo. So I hope it can be positive for us for the future as well.

Do you have anything to say about which states Wager is supposed to launch in?

No more than I mean where we were active before is Tennessee so that's where we will start of course the Yahoo thing is very new so I guess we will see what happens with that but Tennessee is the one state we know of at this point.

Okay, perfect. I have one last question. I know that you focus on already regulated markets, but I've seen Sportradar open a new office in Mumbai and just talked about the cricket market could solely worth over 100 billion US dollars, growing 20% per year, and you've mentioned India as... a market where you want to grow when it regulates or if it regulates ahead of the 2027 financial targets that you have. Is there any possibility that you would be able to launch in such market before it regulates, given the complete focus on B2C operators on the regulation part and KYC procedures?

I mean, We are already to some extent active in India in a very, very small scale. We have refrained from creating a local product and therefore I think we are staying on the right side. But yeah, I think the big step here will happen when the market regulates and when you see more local operators coming in to play. So, yeah, it's some time left, I guess, but we are already active looking at opportunities in India, for sure.

Okay, perfect. Thank you very much. That was all for me. Thank you.

The next question comes from George Attling from Pareto Securities. Please go ahead.

Hi, everyone. Just a few questions from me. If you could just start on the personal restructuring. You said that you let go of 30 people. So I'm just wondering, are all of these traders? And will you continue to cut down on the restructuring on the organization, on the staff headcount, or is this the changes we will see this year?

Yeah, thanks. Yeah, they were predominantly traders, yes. Not all, but largely in the trading department. And I think in terms of future plans, it really depends on the speed and timing and success of rollout of the product roadmap and the different sports that Christian mentioned. Yeah, we talked about kind of efficiencies we will make from Algo when we set those 2027 targets, and this is part of it. So, yeah, but we'll keep you posted when the product's in the right place to enable those efficiencies.

Okay. And on the PAN transition services fees, how much of those were really recognized here in Q1?

No, nothing recognized in Q1. No, they will be recognized Q3 onwards, 1 million a month for 15 months starting July this year.

Okay. I'll just give an update on AWS, maybe what revenue they had in Q1 and also when you expect they to really go live with the full offering and the sort of impact you expect from that in the P&L.

Yeah, for now they're running at about break-even. They're running at around half a million revenue and cost per quarter. And I think the change there will be when they start generating revenue from the odds and the odds contracts. That could be as soon as, I guess, late Q2. But we start seeing some income from that and hopefully it ramps up over time, certainly later this year.

Okay. And the impact on the wager partnership with Shape, will we see that in Q2 already, or will that be some delay before we start to see that in numbers?

No, you should start seeing some impact on the Shape numbers already in Q2, yeah.

And that goes for Beth City as well, I guess, for Shape. You should see that impact in Q2.

Yeah, I think it's slightly less certain when that will start generating revenue, but yeah, it'll either be Q2 or Q3, I believe.

Well, that's it for me.

Thanks.

Please state your name and company. Please go ahead.

Yes, good morning. So given the slowdown with Penn, it's going to be a lower base to roll off from in the second half when they start to migrate their online product. How do you see the seasonality Q2 to Q3 and Q4 then being out given this scenario? This is some kind of a weird year when it comes to seasonality given the roll off. Any comments on that one would be interesting. Also, if Q1 turnovers... initially did match your expectations or if PEN slowed down more than you thought it would?

I can take the last one first there. I mean we already saw the comments coming in about PEN stopping focusing on customer acquisitions during the early part of the quarter so I think we are quite in line with what we expected when it comes to turnover for a quarter. I'll leave our question to you, David.

Yeah, I mean, the seasonality, I think it depends when we hear exactly when PEN are going to roll off. Obviously, that will affect Q3, Q4 numbers. In terms of seasonality, yeah, it's so hard to say. until we actually know when that time is going to be exactly. But if it happens in Q3, then you'll see some impact in Q3. In the past, we've been able to talk about PEN contributing 10% to 15% of our total revenue. Of course, we're going to keep the retail operations, so part of that will stay, but there will be that impact when we know that PEN are leaving. And we'll hopefully be offset by more signings, more launches and general growth of the network.

You said retail is currently around 20% from them, looking at the public numbers?

20% of our lower base, it seems. And also the sequential expectation or whatever you could say about Q2 given... the weird football fixtures scheduled now with the World Cup mixing up with the schedule in Q1 and Q2. What do you expect for the second quarter this year? We heard your comments on American football, but that rolled off already mid-Q1. Any comments here would be helpful as well.

I mean, it's not only the American football that is rolling off. Now we're into a state where the The playoffs of both NBA and NHL have started as well, so it's still quite a lot of activity because it's quite a few playoffs teams still around, but that will decrease during the quarter. The soccer, I think, is the one thing that will hold up better than it usually does because the season will continue longer than it usually does. I think you have still some soccer to be played in June even. So all in all, I think turnover should hold up slightly better, all things equal, than a normal non-big tournament year.

Okay. But the fair expectation would still be down sequentially, Q2 over Q1, I would assume.

Yeah, yeah, absolutely.

And on the OPEX guidance, just if you could help us with the drivers for the low versus the high end. It seems to be tied to shape signings. I don't know if wager is something that will drive OPEX in either way. I would assume that you've included that in your guidance, but comments on the drivers for OPEX, even if you narrowed it, it's still quite wide-ranged.

Yeah, I mean, for a start, yeah, that wager, any OPEX-related wager is included in that full-year guidance. We've narrowed the range from 20 to 15 million. There's still quite a few moving parts in the expanded business we have now. So, you know, it's affected by things like an eye on options, which is driven by the share price. There's bonuses related to performance. You know, there's a few moving parts, which is why we can't narrow down that range too an extremely tight number, but over the year we'll keep narrowing it and hopefully get a much tighter range as we get towards the end of the year.

And the Shape contributions, how much is that in terms of if Shape would add more customers during the year, how sensitive would that be in the office guidance? What sensitivity does Shape have?

I don't So I don't expect it to make us change the range, put it like that. So I think the range can handle signings made by shape during the year. So it's just where in that range it's going to come. I don't think the signings will materially impact the Olympics on a group level.

Speaking of signings, coming in now... But a number of quarkers can be talking about strong sales pipeline. And of course, you have signed a number of operators and renewed as well with some of the large ones. But what can you say now, three months after the CMD laid out the modernization agenda? Any delays in that one? I know you're going for large accounts. That takes time. But any update on that one? Because... I think the market expectations is for that to have already happened, basically. What do you see in terms of adding customers on BetBuilder, for example?

First of all, I think we said already when we started talking about this a year ago that Q2 was our target. It may be changes on that. It depends a little bit what happens with... sales on other areas of more fully managed services. The thing I can say is that the pipeline looks very, very strong. And I'm quite pleased with where we are. But I can't give you very much more color until we do signings. Okay.

Fair enough. And also, the financial targets... including the CEO letter, that the development until 2027 won't be linear. So do you expect a hockey stick in 2027 from a flat development until then? Or what do you see? Not linear, but gradual improvement until then? Just help the market understand what kind of timing you're seeing on improvements.

I mean, you have a couple of... headwinds here. I mean, Penn coming off will obviously be a headwind, for instance. The tailwinds that we can't really estimate when we will happen is things like regulations in major places, Brazil, Asia, California, and so on. But many of those are obviously expect it to happen more like 26 or 27. So yeah, that's a big reason why we expect it to not be linear.

Okay, thank you. And also final question on Americas. How much is the US of that and how much is Latin America? I have a feeling that the market... think the U.S. is larger than it actually is. You want to share something on the split between the two markets?

I'm not sure we... No, I think we're still missing some public numbers, but I think in a few weeks we can comment on that. We're still missing public data. That's the only thing we can refer to, unfortunately.

You can't give us, not the exact figure, but just rough estimate of the relative sizes between the two, maybe.

The trouble is right now our Latin America revenues are kind of dominated by a couple of operators, so giving that number pretty much gives their numbers. So that's why we can't do that, I'm afraid.

Okay, fair enough. Thank you very much.

There are no more questions at this time. So I hand the conference back to the studio for written questions or closing comments.

We actually have quite a few questions here. David, I start with you. When you bought Shape, you wrote that they had revenue of 7.6 million for 2021 with expectations of 100% growth in 2022. In the annual report, we can see that revenue was 11 million for 2022. Considering that you closed that transaction in September, it is a very big difference what happened.

Yeah, I mean, there's been some delays in a few signings, basically. So, obviously, when the acquisition happened, that kind of impacted a few certain deals ongoing. Maybe the focus got shifted onto the acquisition. But now I'm really pleased with the wager signing. That was one that, you know, has now come through. And, you know, there remains a really strong pipeline for that business. So, yeah, there were some delays in achieving those revenues, but I'm very confident about the future revenues for that business.

Thank you, David. Christian, next one is for you. You had an interview with DITV this morning and said that RSI and Betplay accounted for the majority of the revenue in North and South America. It is correct to assume that they account for at least 27% of the revenue. Well, we didn't see if we can really comment on that. So any other call you want to make on that?

No, as I said, I mean, the underlying GGR for Betplay and Rush is more than 50% of our America's number. And that's as much as I'm willing to give.

Thank you. This one is for you, David. On the cost side, can you please elaborate a bit on the reduction of personnel compared to Q4? The increase of staff costs and the on-off during the quarter.

Let me start with the restructuring. I'm not sure I answered the second part of the question, but in terms of the restructuring, around 30 people unfortunately had to leave the business because we recognised efficiencies we could make. That led to costs that when they left the business for around a million. Of course, there are immediately some ongoing savings of a few hundred thousand because they're not in the business. And like I said earlier, longer term, that will lead to, you know, in excess of two million a year savings on the P&L. So, yeah, we've taken one million costs, which hits us this quarter, but longer term, of course, it's for the good of the business and will help the P&L. The second part of the question was?

The increase in staff costs and one-off. I mean I think it's the non-recurrent. I don't know what you said. I think it's just a value increase.

Yeah, of course. It's the annual pay review process. Yeah, and the pay, the severance pay we talked about.

Thank you, David. Christian, I think you already mentioned here, but how does the sales pipeline of BitBuilder's standard model look like?

Well, I think we have focused very much on the fully managed service of the last quarter. It still looks quite good, but it has not been the main focus for the last quarter. But we are very excited for both parts of the business.

Thank you. Next one for you, David. How does the growth look organic without shapes and year-on-year? Basically, what is shape?

Yeah, I mean, like I said, it's around 3 million of revenue in the quarter. So, you know, of that growth from 36.9 to 44, 3 million is shape. But also, the cost is increased by 2.7 on pure OPEX and another 0.9 on the amortization. So, you know, On the profitability level overall, it's not really changed significantly where we were before. The revenue is three million.

Thank you. This one is for you, Christian. You have talked about a strong pipeline during quite a few quarters now. When do you think that will come through in form of new tier one and tier two customers?

Can't comment on that, of course. But, yeah, I'm excited.

Yeah, and if you look at the recent signings, is there any of them you would consider as a tier one operator?

The one we have talked very much about as something very exciting is Raid Dupetaco. Whether it will be a tier one or not in the end, we don't know. But it's a little bit too early to consider it a tier one, I would say.

Another one for you, Christian. You mentioned earlier in the year there are further multi-state opportunities in the US still to be won. Is that still the case? And there have been some articles in the press flagging itself and ballast. Would this be a high priority contract?

So on the first question, yes, it's still the case. And obviously, BALIS is a contract we would love to win, but it's not up to us mainly. But of course, it's a high priority for us.

Thank you. In Q1, you mentioned that you had originally assumed contracts win. wins in the quarter, which had been delayed rather than lost. Is this still the case? And I think we already answered this, but is the outlook for Shape still good?

Yes, I think the outlook for Shape is very good. I think they have had to change their focus slightly and focus more on the customers where we can work together. But yeah, I'm very excited for the shape business.

And it can be the delayed contracts still?

I don't know what else I can say on this topic.

Thank you. David, this one is for you. How many employees do you think you will have at the end of this year?

Not really what I can say is we're not significantly recruiting right now. So, you know, from where we are now, there's no Right now there's no big plans to increase, which I guess is a little bit different to what we've been doing in the past. It's more probably, yeah, it won't be massive recruitment, I would suggest. But I don't want to venture a forecast on kind of headcount. That's quite difficult.

Thank you. Another one. Do you have any buyback share plans?

Well, like I said, I mean... Nothing right now. We've done it in the past, so of course we could activate it again in the future. And as I've talked about a lot earlier, we've got a pretty healthy cash balance now, so we've got the firepower to do that or other things with the balance sheet.

Many questions today. Christian, this one is for you. Your 2027 targets, do you assume Kindred has left the network? And as a follow-up, in the short term, are you assuming a change in control of Kindred will lead them to leave the network sooner than 2026?

I can't comment on Kindred of course I'm pleased we have a contract with them with a minimum revenue guarantee over the next three and a half years I would guess it very much depends on if they are bought who are buying them whether we have an opportunity to serve them or not.

Thank you. Another one for you, Christian. Have there been any tailwinds in the U.S. towards outsourcing, noting some recent public comments from retail casino operators?

I think a general sentiment we see both in Europe and the U.S., I would say, is that, I mean, it becomes more and more important with profitability, and that is always a good thing for suppliers, I would say. So I think we are in a very good shape.

Thank you. Is it in line if the competitive landscape has changed in the U.S.? Or are there similar competitors presented in RFP processes?

It depends on when you look at it, but it's quite the same. Since SB Tech left, I think it has been very much about us and open bet. There is a few other smaller ones that are trying to come into a business, but as an open bet there are two big ones at the moment.

Thank you. Another one for you, Christian. I think this is the last one. Which of the product offering do you see biggest potential in? Is it module, full, sportsbook?

For the moment, yes. I I definitely believe that different kinds of sophisticated trading products will also be very, very interesting for us for the future.

Okay, thank you very much for the questions. Thank you, Christian. Thank you, David. We will be back here for our Q2 report the 26th of July. And as always, if you have questions, feel free to reach out to the IR department. I wish you a very good day and thank you very much.