Kambi Group plc

Good morning everyone and welcome to Canby's Q3 earnings call. At this time all participants are in a listen-only mode. After the speaker presentations there will be time for questions and answers. If you are following us on the teleconference and wish to ask a question please press star 1 1. If you are following us through the webcast you may submit your questions through the chat. Please be advised that today's conference is being recorded. So the agenda for today, we will start with some highlights from our CEO, Werner Becher, followed by a financial summary from our CFO, David Kenyon. Then Werner will come back with some operational highlights and the summary of the quarter. Following the presentation, we will have time for the Q&A. With that, I would like to hand over the conference to you, Werner. Please go ahead.

Thanks, Mattias. And good morning, everyone. Today's report sets out some of the important steps we have been taking, putting in place key building blocks to enable long-term sustainable growth. On the commercial side, we've been incredibly busy. Momentum is really picking up. Since the start of the third quarter, we have signed 12 new commercial agreements, which I will recap shortly. Three of those agreements were on our Odds Feed Plus product, perhaps headlined by the recent partnership with Tier 1 operator Super Pet Group. This morning, we announced the acquisition of the source code of a player account management platform. We believe the addition of a proprietary PAM alongside our market-leading sportsbook product will open doors to new opportunities. Our immediate focus is on markets with limited viable third-party options on the PAM side, with Nevada on top of our list. And finally, our underlying performance met expectations in Q3, reflecting strong margins and a continued focus on cost discipline. However, microeconomic pressures have heightened, while our planned launch with Ontario Lottery is now likely to take place in early Q1 2026. These factors have led us to adjust our full year EBITDA guidance for 2025 to around 17 million euros. I now hand over to you, David, to give you more details on the financials, please. Thank you, Werner. And good morning, everyone.

Firstly, a summary of Q3. So revenue was 37.4 million euros this quarter. Excluding non-recurring transition fees that we received last year, this represented a decrease of 8.1%. And on the same basis, year-to-date revenue is down 1.2%. However, ongoing efficiency program enabled us to significantly reduce our costs in the quarter. And this led to an adjusted EBITAC, earnings per interest tax and amortization on acquisitions, of 3.4 million for the quarter. Excluding foreign exchange on revaluations, this metric was 3.1 million for the quarter and 10.3 million year-to-date. Our underlying cash flow was positive, and after carrying out 8.1 million of buybacks in the quarter, we end the period with a cash balance of 45.4 million euros. This slide sets out the operator trading analysis, an index of the aggregated performance for our operators on our turnkey sportsbook. You'll see this course representing it in a new way to really highlight the seasonality of the sporting calendar that we see every year. This is driven in particular by the timing of the American football, the soccer, and the basketball sporting seasons. Q1 and Q4 always have the highest turnover of the four quarters each year. We should expect the same pattern this year with a spike up in Q4. Compared to Q3 last year, turnover was down 6%. Whilst we did see organic growth from certain customers and some new launches, this was offset by a number of factors, including the tournaments we had last year, Euros and Copa America in soccer, and also the Olympics. We had the FX impact for weaker Colombian peso and US dollar versus last year. Kindred carried out more migrations during the year. Originally the dot-com markets in Q4 last year, and now the UK migrated at the start of September. And as mentioned in previous quarters, we have an ongoing impact from deposit limits in the Dutch market, which is also affecting our turnover. The operator trading margin for the quarter was 10.3%. This was a really strong margin in July and August and then dipped quite significantly in September when there were very player-friendly results, I would say, in both the Champions League and the NFL. This slide sets out the evolution of our adjusted EBITDA from Q3 last year to this year. Firstly, we saw material organic growth from a number of our operators, especially in the US and Latin America. In terms of new customers versus Q3 last year, this came in particular from our operators in Brazil, as well as those using the Odds Feed Plus service. Then the negative, the downward pressures on that EBITDA came as mentioned from the tournaments last year, Euros, Copa America and Olympics, with this year a much smaller contribution from the Football Club World Cup. This, of course, is a temporary headwind. Another temporary non-recurring tough comparative is the transition fees which we received last year from Penn and Napoleon. This reduced to 2.3 million this quarter. It will reduce again in Q4 before disappearing at the end of the year. In terms of migrations, Kindred exited the dot-com markets in Q4 last year and has mentioned UK at the start of September this year. There's also smaller amounts from migrations from Mr. Green and GreenTube in these numbers. In the gaming tax and other column, we see a number of factors. Firstly, the impact of those deposit limits in the Netherlands. Also, as referenced earlier in the year, the new VAT on deposits in Colombia has had a material impact on our numbers. There's also been other gaming tax increases in the Netherlands and various US states. Finally, we also see the impact of changing effective commission rates with certain customers in this column. Pushing the EBITDA upwards is the cost savings column there. The costs are roughly 4 million lower than the same quarter last year. This is largely driven by reduction in our staff costs with around 50 FDs lower versus last year and relocations of roles to lower cost locations. There was also some staff bonus costs taken last year which we've not accrued this year. The second piece here is a positive 1.2 million swing in the FX on revaluations. We had a 900 negative last year and a 300 positive this quarter. This is a non-recurring benefit to our cost base this quarter. I want to point out one other thing on our low staff cost this quarter in particular. In Sweden and Denmark, we accrue the cost of vacation pay during the year and we release the accrual when the staff take holiday in the summer months. This is a seasonal pattern seen every year and this showed a 1.1 million benefit in our OPEX versus Q2. This slide sets out our cash flow in the quarter. We had an opening cash balance of 53.1 million. We did see an increase in certain trade receivables balances, which we expect to be paid for in Q4. And we spent 8.1 million on share repurchases in the quarter, taking our closing cash balance to 45.4 million. Werner will tell you more about the acquisition of the PAM source code we made today. Whilst we cannot disclose the purchase price, I can say that it will not impact our capital return strategy to return excess capital to shareholders through buybacks. and I would expect our upcoming buyback program to continue at a similar pace to our current program. Werner referenced the change in guidance. Our original guidance was an adjusted EBITDA excluding FX revaluations of 20 to 25 million euros. Three main factors result in that changing today. Firstly, the regulated Brazilian market in general has developed more slowly than expected. There have been stringent regulatory requirements, including on AML, and this has led to certain friction converting players from the pre-regulated market. Secondly, there have been FX headwinds, especially the weakening of the US dollar and the Colombian peso versus when we set the guidance. Today, this has had a 1.8 million negative impact on our numbers. If the FX stays roughly where it is, that number is likely to become around 2.6 million by the end of the year. Lastly, Ontario Lottery and Gaming. We had originally hoped for a Q3 launch with this operator. This moved to a December launch due to the significant level of development work and testing needed prior to launch. This now looks very likely to move to January 2026 as this testing is finalized. On the flip side, we've managed to stay close to our original guidance with the tight cost control and the efficiency program I've referenced earlier. But as of today, we expect our adjusted EBITDA for 2025 to be around 17 million euros. And with that, I pass you back to Werner.