Affiliate service provider for the gaming industry Gambling.com Group released its full-year 2021 financial results on Thursday, reporting revenue growth of 51% and one 17.8% decline in net income.
Organic revenue growth
Gambling.com Group turnover for the financial year ended December 31, 2021amounted to $42.3 millionup from the $28 million reported the previous year and in line with the group’s latest revenue estimate of $42.1 million and $42.5 million.
Growth was driven primarily by Gambling.com’s European business excluding the UK and Ireland, which contributed to an increase in 106%, $10.8 million compared to $5.3 million in 2020. North American operations made a significant contribution, up 89% for $7.5 million compared to $4 million reported in 2020.
Organic revenue growth was fueled by the 13% increase in the number of new depositing clients 117,000 compared to 104,000 the previous year, as well as better monetization of new depositing clients attributed to technological improvements and changes in product and market mix.
“We grew our revenue in 2021 by 51% over the prior year, delivered an EBITDA margin of 43% and generated over $8 million in free cash flow, as many other players in the industry struggled to find a path to sustainable profitability,” the full report summarized. annual results of the Gambling.com group CEO and Co-Founder Charles Gillespie.
Increased headcount eroding bottom line
Operating expenses reached $30.9 million, at the top 84% over the previous year’s reading of $8.1 million, primarily due to the 114% increase in general and administrative costs. Sales and marketing expenses jumped 74%while technology spending increased by 58%.
Gambling.com attributed these increases to the increase in the number of employees and the associated increase in salaries and wages in the Administration, Sales, Marketing and Technology departments.
Favorable for the period under review was the 134% off provisions for credit losses and write-offs which turned out to be negative $97 million of $287 million in 2020, but this was not enough to fully offset the increase in other operating expenses.
The increase in revenues partially offset by the increase in operating expenses led to an adjusted EBITDA of $18.4 millionat the top 26% to $14.6 million in 2020 and representing an adjusted EBITDA margin of 43%.
Operating profit was $11.4 millionup slightly from $11.1 million in 2020, impacted by one-time costs of $2.6 million related to the public offering and future acquisitions and $2 million share-based payment costs.
The net result in 2021 amounts to $12.5 million, down 18% year-over-year of the $15.2 million recorded in 2020. The company explained the decrease by favorable conditions in 2020 related to the recognition of deferred tax assets of $5.4 million ($1.8 million in 2021) and bond buyback gains of $1.4 million ($nil in 2021).
At the end of the year, Gambling.com reported free cash flow of $8.4 milliondown 28.6% of $10.8 million at the end of 2020. The decline was attributed to an increase in 28% of cash generated by operations $14.0 million being partially offset by increased capital expenditures – principally, domain name acquisition and capitalized development costs.