Gambling.com Group Limited, a leading provider of digital marketing services for the global online gambling industry, today announced its operating and financial results for the year and the fourth quarter ended December 31, 2021.

2021 Financial Highlights

• North American revenue grew 89% to $7.5 million compared to $4.0 million for the prior year
• Revenue of $42.3 million grew 51% compared to $28.0 million for the prior year
• Net income of $12.5 million, or $0.37 per diluted share, compared to a net income of $15.2 million, or $0.49 per diluted share, for the prior year
• Adjusted EBITDA of $18.4 million increased 26% compared to $14.6 million for the prior year, representing an Adjusted EBITDA margin of 43%¹
• Free cash flow of $8.4 million decreased 22% compared to $10.8 million for the prior year¹

Fourth Quarter 2021 Financial Highlights

• North American revenue grew 56% to $2.2 million compared to $1.4 million in the same period for the prior year
• Revenue of $10.3 million remained consistent to $10.3 million in the same period for the prior year
• Net income of $0.9 million, or $0.02 per diluted share, compared to a net income of $8.5 million, or $0.35 per diluted share, in the same period for the prior year
• Adjusted EBITDA of $2.3 million decreased 63% compared to $6.1 million in the same period for the prior year, representing an Adjusted EBITDA margin of 22%¹
• Free cash flow of $(1.8 million) compared to $3.5 million for the prior year¹

Business Highlights

• Completed successful public listing of ordinary shares on the Nasdaq Global Market in July 2021 under the ticker symbol “GAMB”
• Named the 2021 EGR Affiliate of the Year and 2021 SBC North America Casino Affiliate of the Year
• Delivered 117,000 new depositing customers in 2021 compared to 104,000 in 2020
• Launched several new U.S.- facing websites during 2021 and acquired an incredibly strong portfolio of U.S. specific domain names
• Announced the acquisition of RotoWire.com – a leader in U.S online fantasy sports – in December 2021 to leverage RotoWire’s high-quality traffic and drive substantial incremental sports betting affiliate revenue in the U.S., the acquisition was completed on January 1, 2022
• Announced media partnership with McClatchy in January 2022 to monetize the McClatchy portfolio of digital media assets through sports betting in 29 markets across 14 states
• Successfully entered the New York and Louisiana markets in January 2022
• Announced acquisition of BonusFinder.com in February 2022 to better position the Group for the upcoming market launch in Ontario and further strengthening the Group’s North American presence

“We grew our revenue in 2021 by 51% compared to the prior year, delivered an EBITDA margin of 43% and generated over $8 million of free cash flow as many other industry players struggled to find a path to sustainable profitability,” said Charles Gillespie, Chief Executive Officer and Co-founder of Gambling.com Group. “As we look towards 2022, we are encouraged by the strongest start to a year we have seen in our 15-year history. Helped by launches in New York and Louisiana, January was our best-single month performance ever – even before consolidating financial results from our recent acquisitions. Just in January, we have seen the total addressable market in North America expand by leaps and bounds and there is a clear path to additional state launches this year, along with the impending launch of Ontario next month. As B2C operators in the U.S. seek a path to sustainable profitability and evaluate their marketing spend going forward, we believe that the affiliate model is ideally positioned to provide operators with more effective, higher ROI investments where they can clearly attribute the source, profitability and lifetime value of a referred player. We view this shift as greatly benefitting the value of our performance marketing revenue model, and we are confident that these tailwinds support what we expect to be another year of record performance for the Group.”

2022 Outlook

Based on currently available information, the Group estimates that, for the full year 2022:

• Total revenue will be in the range of $71 million and $76 million; and
• Adjusted EBITDA will be in the range $22 million and $27 million¹

Elias Mark, Chief Financial Officer of Gambling.com Group, added, “Our expectation for another year of record revenue and Adjusted EBITDA is supported primarily by our premier domain portfolio and our growing presence in the U.S. achieved through continuous investments in U.S-facing assets. Organic growth in North America is complemented by our recent acquisitions of RotoWire.com and BonusFinder.com as well as our initiatives to further our leadership in the more established markets that we currently serve. As we have stated, our Adjusted EBITDA margin may deviate from target in the short-term as we strategically invest to strengthen our U.S. footprint, which is reflected in our 2022 outlook. Nonetheless, our profitability metrics remain among the very best in the industry, and our free cash flow generation more than covers our organic growth initiatives and the acquisition of domain names and other assets. We entered 2022 on strong financial footing and are off to the best start to a year in the Company history led by strong growth in North America. We grew total revenue profitably by 51% in 2021 and we look forward to accelerate that rate of profitable growth in 2022.”

¹ Adjusted figures represent non-IFRS information. See “Non-IFRS Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable IFRS numbers.

² Leverage is defined as Net Debt as a proportion of Adjusted EBITDA.

³ Net Debt is defined as Borrowings less Cash and Cash Equivalents.

n/m = not meaningful

1. We define New Depositing Customers, or NDCs, as unique referral of a player from our system to one of our customers that satisfied an agreed metric (typically making a deposit above a minimum threshold) with the customer, thereby triggering the right to a commission for us.

Revenue

Total revenue increased 51% to $42.3 million for the year ended December 31, 2021 compared to $28.0 million for the prior year. On a constant currency basis, revenue increased $13.4 million, or 46%. Revenue growth was organic. The increase was driven by both growth in NDCs and improved monetization of NDCs that we attribute to a combination of technology improvements and changes in product and market mix. NDCs increased 13% to 117,000 compared to 104,000 in the prior year.

Our revenue disaggregated by market is as follows:

Revenue increases were primarily driven by growth in revenue from the U.K. and Ireland, Other Europe, and North America.

Our revenue disaggregated by monetization is as follows:

Revenue increases were driven primarily by additional Cost Per Acquisition, or CPA, commission and Other revenue. The increase in Other revenue was driven by bonuses related to achieving certain operator NDC performance targets and fixed fees.

Our revenue disaggregated by product type from which it is derived is as follows:

Revenue increases were driven by growth in revenue from casino and sports products.

Operating Expenses

Total operating expenses increased by $14.1 million to $30.9 million compared to $16.8 million in the prior year. On a constant currency basis, operating expenses increased by $13.5 million, or 77%. The increase was driven primarily by increased headcount across Sales and Marketing, Technology, and General and Administrative functions as we invest in the Company’s organic growth initiatives as well as increased administrative expenses associated with operating as a public company.

Sales and Marketing expenses totaled $14.1 million compared to $8.1 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount.

Technology expenses totaled $4.0 million compared to $2.5 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount partially offset by capitalized development costs.

General and Administrative expenses totaled $13.0 million compared to $6.0 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount, professional services, and insurance expenses.

Earnings

Adjusted EBITDA increased by 26% to $18.4 million compared to $14.6 million in the prior year representing an Adjusted EBITDA margin of 43%. The increase was driven primarily by increased revenue partly offset by increased operating expenses.

Operating profit remained relatively constant at $11.4 million compared to $11.1 million in 2020. Operating profit in 2021 was affected by non-recurring costs related to the public offering and future acquisitions by $2.6 million, and share based payments costs by $ 2.0 million ($0.7 million and $0.4 million, respectively, in 2020).

Net income totaled $12.5 million, or $0.37 per diluted share, compared to net income of $15.2 million, or $0.49 per diluted share, in the prior year. Net income in 2020 was positively affected by the recognition of deferred tax assets of $5.4 million and gain from bonds’ redemption of $1.4 million ($1.8 million and zero, respectively, in 2021).

Free Cash-flow

Total cash generated from operations of $14.0 million increased 28% compared to $10.9 million in the prior year. The increase was driven primarily by increased adjusted EBITDA. Free cash flow totaled $8.4 million compared to $10.8 million in the prior year. The decline was the result of increased cash flow generated from operations offset by increased capital expenditures consisting primarily of the acquisition of domain names and capitalized development costs.

1. Working capital is defined as total current assets minus total current liabilities.

n/m = not meaningful

Cash balances as of December 31, 2021 totaled $51.0 million, an increase of $42.8 million compared to $8.2 million as of December 31, 2020. Working capital as of December 31, 2021 totaled $46.7 million, an increase of $36.6 million compared to $10.1 million as of December 31, 2020.

Total assets as of December 31, 2021 were $91.0 million compared to $45.4 million as of December 31, 2020. Total borrowings, including accrued interest, remained constant at $5.9 million as of December 31, 2021 and 2020. Total liabilities decreased slightly as of December 31, 2021 to $11.1 million compared to $11.2 million as of December 31, 2020.

Total equity as of December 31, 2021 was $79.9 million compared to $34.2 million as of December 31, 2020.

The increases in working capital, total assets, and total equity were driven primarily by the net proceeds received from the IPO and operating profit and net income generated by the Company.

n/m = not meaningful

1. We define New Depositing Customers, or NDCs, as unique referral of a player from our system to one of our customers that satisfied an agreed metric (typically making a deposit above a minimum threshold) with the customer, thereby triggering the right to a commission for us.

Revenue

Total revenue in the fourth quarter remained relatively constant at $10.3 million. On a constant currency basis, revenue remained relatively constant. NDCs decreased 20% to 28,000 compared to 35,000 in the prior year. We attribute the improved monetization of NDCs to a combination of technology improvements and changes in product and market mix.

Our revenue disaggregated by market is as follows:

Changes in revenue were driven by strong organic growth in our North American markets, offset by a decline in the U.K. and Ireland and, to a lesser extent, Other Europe and Rest of the world. U.K. and Ireland revenue was negatively affected by higher than usual volatility in organic search traffic. In the comparable period, U.K. and Ireland revenue was positively affected by increased demand coinciding with restrictive Covid-19 measures. Other Europe was negatively affected by regulatory changes in Germany implemented in July 2021 partly offset by growth in revenue from other European markets.

Our revenue disaggregated by monetization is as follows:

Revenue from CPA commission and Other revenue increased whereas revenue from hybrid and revenue share commission decreased. The changes in monetization were primarily a result of changes in market mix with a higher proportion of revenue from the U.S compared to the previous year. The increase in Other revenue was driven primarily by bonuses related to achieving certain operator NDC performance targets and fixed fees.

Our revenue disaggregated by product type from which it is derived is as follows:

Revenue increases were driven by growth in revenue from sports products offset by a decrease in casino and other revenue.

Operating Expenses

Total operating expenses increased by $3.8 million to $9.7 million compared to $5.9 million in the prior year. On a constant currency basis, operating expenses increased by $3.6 million, or 58%. The increase was driven primarily by headcount across Sales and Marketing, Technology, and General and Administrative functions as we invest in the Company’s organic growth initiatives as well as increased administrative expenses associated with operating as a public company.

Sales and Marketing expenses totaled $4.6 million compared to $2.4 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount.

Technology expenses totaled $1.2 million compared to $0.8 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount partially offset by capitalized development costs.

General and Administrative expenses totaled $3.9 million compared to $2.6 million in the prior year. The increase was driven primarily by increased wages and salary expenses associated with increased headcount, professional services, and insurance expenses.

Earnings

Adjusted EBITDA decreased by 63% to $2.3 million compared to $6.1 million in the prior year representing an Adjusted EBITDA margin of 22%. The decrease was driven by increased operating expenses.

Operating profit in the fourth quarter decreased 86% to $0.6 million compared to $4.4 million in 2020. The decrease was driven primarily by a decrease in Adjusted EBITDA and an increase in share-based payments expense.

Net income in the fourth quarter totaled $0.9 million, or $0.02 per diluted share, compared to net income of $8.5 million, or $0.35 per diluted share, in the prior year. Net income in the forth quarter 2021 was positively affected by a USD/Euro foreign currency exchange gain of $1.1 million (zero in 2020). While net income in the fourth quarter of 2020 was positively affected by the recognition of deferred tax assets of $5.4 million (deferred tax asset reduction of $0.2 million in 2021).