Q1 2024 Gambling.com Group Ltd Earnings Call

Okay.

Operator: Greetings and welcome to the Gambling.com Group First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Peter McGough, Senior Vice President of Investor Relations and Capital Markets. Thank you, sir. You may begin.

Speaker Change: Greetings and welcome to the gambling Dotcom group's first quarter 'twenty 'twenty four earnings conference call. At this time, all participants are in a listen only mode.

Brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Speaker Change: As a reminder, this conference is being recorded it is now my pleasure to introduce your host Peter Mccarthy Senior Vice President of Investor Relations and capital markets. Thank you Sir you may begin.

Peter McGough: Hello, everyone, and welcome to the Gambling.com Group's first quarter 2024 results call. I am Peter McGough, Senior VP of Investor Relations and Capital Markets. I'm joined by Charles Gillespie, Gambling.com Group's co-founder and Chief Executive Officer, and Elias Mark, Chief Financial Officer. This call is being webcast live through the investor relations section of our website at www.gambling.com forward slash corporate forward slash investors, and a downloadable version of the presentation is available there as well. A webcast replay will be available on the website after the conclusion of this call. You may also contact investor relations support by emailing investors at gdcgroup.com.

Speaker Change: Hello, everyone and welcome to the gambling Dotcom group's first quarter 2024 results call I'm, Peter Mccarthy Senior VP of Investor Relations and capital markets I'm joined by Charles Gillespie gambling Dot Com group's cofounder and Chief Executive Officer, and Elliot Mark <unk> Chief Financial Officer.

Speaker Change: This call is being webcast live through the Investor Relations section of our website at gambling dotcom forward slash corporate forward slash investors and a downloadable version of the presentation is available there as well a webcast replay will be available on the website. After the conclusion of this call you may also contact.

Speaker Change: Investor Relations support by Emailing investors at GTC Group Dotcom.

Peter McGough: I would like to remind you that the information contained in this conference call, including any financial and related guidance to be provided, consists of forward-looking statements as defined by securities laws. These statements are based on information currently available to us and involve risks and uncertainties that could cause actual future events, performance, and business prospects, and opportunities to differ materially from those expressed in or implied by these statements. Some important factors that could cause such differences are discussed in the risk factors section of Gambling.com Group's filings with the Securities and Exchange Commission.

Speaker Change: I would like to remind you that the information contained in this conference call, including any financial and related guidance can be provided consists of forward looking statements as defined by securities laws.

Speaker Change: These statements are based on information currently available to us and involve risks and uncertainties that could cause actual future events performance and business prospects and opportunities to differ materially from those expressed in or implied by these statements. Some important factors that could cause such differences are discussed in the risk factors section of gambling.

Speaker Change: Dot Com group's filings with the Securities and Exchange Commission.

Peter McGough: Forward-looking statements speak only as of the date the statements are made, and the company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities law. During the call, there will also be a discussion of non-IFRS financial measures. A description of these non-IFRS financial measures is included in the press release issued earlier this morning, and the reconciliations of these non-IFRS financial measures to their most directly comparable IFRS measures are included in the appendix to the presentation and press release, both of which are available under the Investors tab of our website. I'll now turn the call over to Charles.

Speaker Change: Forward looking statements speak only as of the date. The statements are made and the company assumes no obligation to update forward looking statements to reflect actual results changes in assumptions or changes in other factors affecting forward looking information except to the extent required by applicable securities laws.

Speaker Change: Yeah.

Speaker Change: During the call. There will also be a discussion of non <unk> financial measures a description of these non <unk> financial measures is included in the press release issued earlier this morning, and the reconciliation of these non <unk> financial measures to their most directly comparable <unk> measures are included in the.

Speaker Change: The appendix to the presentation and press release, both of which are available in the investors tab of our website.

I'll now turn the call over to Charles.

Speaker Change: Yeah.

Charles Hanson Gillespie: Good morning, and thank you for joining us. We are off to a great start in 2024 with year-on-year growth across every region, but before we get into the results, I'd like to begin by thanking Mark Blanford for over 15 years of distinguished service on our board of directors. With Mark's support, we have grown this business from a small startup in 2008 to one of the leading companies in our space. Mark's mentorship and insight over the years have played an instrumental role in the development of the company, and I have no doubt he will remain just as strong of a supporter in his retirement. Now on to the results.

Charles Hanson Gillespie: Good morning, and thank you for joining us.

Charles Hanson Gillespie: We are off to a great start in 2024 with year on year growth across every region, but before we get into the results I'd like to begin by thanking Mark Blanford Forever 15 years of Distinguished service on our board of directors with March support we have grown this business from a small start up in 2008.

Charles Hanson Gillespie: So one of the leading companies in our space.

Charles Hanson Gillespie: Mentorship and insight over the years has played an instrumental role in the development of the company.

Charles Hanson Gillespie: No doubt you will remain just as strong to support in his retirement.

Mark Blanford: Now onto the results robust revenue performance around the world led us to record Q1 revenue and very strong adjusted EBITDA and free cash flow metrics, which exceeded consensus estimates across the board.

Charles Hanson Gillespie: Robust revenue performance around the world led us to record Q1 revenue and very strong adjusted EBITDA and free cash flow metrics, which exceeded consensus estimates across the board. While we have been phenomenally successful in North America in recent years, these results are a reminder that we operate a global high-growth business with multiple profit centers around the world. We have built and continue to expand a business that is positioned to consistently monetize the many global growth opportunities that exist today in the online gambling industry.

While we have been phenomenally successful in North America. In recent years. These results are a reminder, that we operate a global high growth business with multiple profit centers around the world.

Mark Blanford: We have built and continue to expand the business that is positioned to consistently monetize the many global growth opportunities that exist today in online gambling industry.

Charles Hanson Gillespie: A strong foundation centered on a branded, highly effective global website portfolio, including the recent addition of FreeBets.com, along with our best-in-class technology stack, sets the company up for long-term growth. And as new international markets continue to be regulated, new states approve online sports betting, and iGaming becomes a bigger part of the online betting ecosystem in the U.S., our growth opportunities will only continue to expand, just as they have done for the past 18 years.

Mark Blanford: Our strong foundation centered on a branded highly effective global website portfolio, including the recent addition of pretty Bestbuy com along with our best in class technology stack sets the company up for long term growth.

Mark Blanford: And as new International markets continued to be regulated new states approved online sports betting and I gaming becomes a bigger part of the online betting ecosystem in the U S. Our growth opportunities will only continue to expand just as they have done for the past 18 years.

Charles Hanson Gillespie: At the same time, we will further extend our successful track record of execution to capitalize on these secular growth opportunities and continue to do so in a highly capital efficient manner, ultimately driving substantial increases in cash flow. Last year, we exceeded $100 million in revenue for the first time.

Mark Blanford: At the same time, we will further extend our successful track record.

Mark Blanford: Of execution to capitalize on these secular growth opportunities and continue to do so in a highly capital efficient manner, ultimately driving substantial increases to cash flow.

Last year, we exceeded 100 million in revenue for the first time.

Charles Hanson Gillespie: While we have seen many milestones on our journey, this was the most tangible evidence yet of our growth. As I look forward, it is clear what the next major milestone will be, $100 million in adjusted EBIT. This is the logical next step for the company to drive towards as we continue to execute on all of the organic growth opportunities we have and layer on additional accretive acquisitions, which will expand our footprint within the online gambling ecosystem. Being at the center of two very important long-term trends will help us hit this next milestone.

While we have seen many milestones on our journey. This was the most tangible evidence yet of our growing scale.

Mark Blanford: When I look forward. It is clear what the next major milestone will be $100 million and adjusted EBITDA.

Mark Blanford: This is the logical next step for the company to drive forward as we continue to execute on all of the organic growth opportunities, we have and layer on additional accretive acquisitions, which will expand our footprint within the online gambling ecosystem.

Mark Blanford: Being at the center of two very important long term trends will help us hit. This next milestone gambling is digitizing.

Charles Hanson Gillespie: Gambling is digitized. The revenue of online gambling has exceeded the revenue of land-based gambling in many markets throughout the world, where it has been regulated for some time. In certain cases, online gambling is over 90% of the total gambling market. However, this trend for iGaming still has a very long way to go in the US, the world's largest casino market, where the percentage in 2023 was only 10%.

Mark Blanford: Revenue was online gambling has exceeded the revenue land based gambling in many markets throughout the world where it has been regulated for some time in certain cases online gambling is over 90% of the total gamma market.

Mark Blanford: This trends for I gaming still has a very long way to go in the U S. The world's largest casino market, where the percentage in 2023 was only 10%.

Charles Hanson Gillespie: The second key long-term trend is the ongoing digital revolution in advertising. Whereas marketers were previously blind, now they can see due to the clean and clear attribution available from all digital channels. MediaMath sits at the intersection of both of these clear, long-term trends with our technology platform and portfolio of assets. But at the center of that portfolio is a core of indomitable brands like Gambling.com, PhotoWire.com, and Bookie.com, unique assets which will forever be at the heart of online gambling. All of us at Gambling.com Group are excited to be on this journey and eager to capitalize on these opportunities.

Mark Blanford: The second key long term trend is the ongoing digital revolution in advertising, whereas marketers were previously blind now they can see due to the clean and clear attribution available from all digital channels.

Mark Blanford: And we got Com group's sits at the intersection of both of these clear long term trends with our technology platform and portfolio of assets.

Mark Blanford: At the center of that portfolio is a core of indomitable brands like gambling dotcom, OTA wire dot com and bookings dotcom unique.

Mark Blanford: Unique assets, which will forever be at the heart of online gambling.

Mark Blanford: All of them say gambling Dot Com group are excited to be on this journey and eager to capitalize on these opportunities.

Mark Blanford: Yeah.

Charles Hanson Gillespie: There have been some significant shifts in the digital landscape over the past 10 days, which are having an effect on every corner of the Internet. For example, over the past several years, large websites with strong reputations, like newspapers, have increasingly pivoted to performance marketing to drive revenue from commercial content, like coupon codes, credit card offers, and sports betting. Given their strong reputations and attention to content quality, they have succeeded in ranking competitively in Google's results for these commercial terms, and this has created new lines of revenue for them.

There have been some significant shifts in the digital landscape over the past 10 days, which are having an effect on every corner of the internet.

Mark Blanford: Over the past several years large web sites with strong reputations like newspapers have increasingly pivoted to performance marketing to drive revenue from commercial content like coupon codes credit card offers and sports betting.

Mark Blanford: Given their strong reputations and attention to content quality. They have succeeded in ranking competitively and Google's results for these commercial terms and created new lines of revenue for themselves.

Charles Hanson Gillespie: This has been a boon for these legacy media organizations, which have been searching for ways to improve their digital monetization. In many cases, these websites have partnered with industry specialists in each vertical to improve the quality of the content and maximize the business potential of these efforts. This is exactly what we have done with McClatchy, The Independent, and Gannett. However, as with everything online, there are also examples of abuse. The most egregious abuses of a site's reputation occur when hackers gain unauthorized access to a website and put up individual pages targeting commercial content that are poor quality and stick out like a sore thumb.

Mark Blanford: This has been a boon for these legacy media organizations, which had been searching for ways to improve their digital monetization.

Speaker Change: In many cases these websites have partnered with industry specialists in each vertical to improve the quality of the content and maximize their business potential of these efforts. This is exactly what we have done with Mcclatchy independent.

Mark Blanford: Net.

Mark Blanford: As with everything online. There are also examples of abuse. The most egregious abuses of a sites reputation occur when hackers gained unauthorized access to our web site and put up individual pages targeting commercial content that are poor quality and stick out like a sore thumb.

Charles Hanson Gillespie: There are also many shades of gray between this sort of obvious abuse and the relevant and accurate commercial concept that powers many of these legacy media organizations. Google has been working to reduce the prevalence of these instances of clear abuse. For many months, Google's human reviewers have been internally flagging content which they perceive to be violating their policy in what they refer to as site reputation abuse.

Mark Blanford: There are also many shades of gray between the sort of obvious abuse and the relevant and accurate commercial content.

Mark Blanford: That powers many of these legacy media organization.

Speaker Change: Google has been working to reduce the prevalence of these instances a clear abuse for many months Google's human reviewers had been internally flagging content, which they perceived to be violating their policies on what they referred to as site reputation abuse.

Charles Hanson Gillespie: On May 5th, Google activated the new policy publicly, informing webmasters that certain content may violate the policy and demoting such content in Google's search results. The amount of content that has fallen within the perimeter of Google's new policy is greater than anyone would have expected. Whether that content was created by the legacy media organization entirely on its own or with the help of a specialist partner, this is not a typical update to Google's algorithm, not just for online gambling.

Speaker Change: On may 5th Google activated the new policy publically informing webmasters.

Speaker Change: Search and content may violate the policy and devoting such content and Google's search results.

Speaker Change: The amount of content that is falling within the perimeter of Google's new policy is greater than anyone would have expected.

Speaker Change: Whether that content was created by the legacy media organization entirely on their own or with the help of a specialist partner.

Speaker Change: This is not a typical update to google's algorithms, but rather a global policy shifts which affects all industries.

Speaker Change: Not just online gambling.

Charles Hanson Gillespie: Google has effectively moved the goalposts on what they deem to be acceptable locations for particular types of commercial content. Virtually all media partners, including the ones in the online gambling industry and our own, have been affected. We remain committed to our media partners as they organize to make a concerted effort to push back on what they perceive to be an overly broad implementation of this new policy. After all, newspapers were making money off of coupons long before the internet ever existed.

Speaker Change: Hugel has effectively moved the goalposts on what they deem to be acceptable locations for particular types of commercial content.

Virtually all media partnerships, including the ones in the online gambling industry and our own had been affected.

Speaker Change: We remain committed to our medium partners as they organized to make a concerted effort to push back on what they perceive to be an overly broad implementation of this new policy.

Speaker Change: After all newspapers were making money off of coupons long before the internet ever existed.

Speaker Change: For the avoidance of doubt.

Charles Hanson Gillespie: Our owned and operated sites are unaffected, and will benefit from less competition in the search engine results pages from legacy media websites. We do expect to receive more traffic directly to our own specialist brands like Gambling.com, RotoWire.com, and Bookies.com, and we can already see signs of this shift, with a higher proportion of traffic flowing directly to our owned and operated assets. [inaudible] Revenue, however, will be directly, The strength of our owned and operated assets and the resiliency of our business enable us to continue to expect healthy year-on-year growth and adjusted EBITDA despite this major and unexpected shift in the digital media landscape.

Speaker Change: Our owned and operated sites are unaffected and.

Speaker Change: And we will benefit from less competition in the search engine results pages from legacy media websites.

Speaker Change: We do expect to receive more traffic directly to our own specialist brands like gambling Dot com.

Speaker Change: Wired dot com and bookies dot com and we can already see signs of this shift.

Speaker Change: With a higher proportion of traffic flowing directly to our owned and operated assets and lower fees paid to pay out to our media partners.

Speaker Change: Net effect on EBITDA of these changes will be limited.

Speaker Change: Revenue, however will be directly affected.

Speaker Change: The strength of our owned and operated assets and our and the resiliency of our business enable us to continue to expect healthy year on year growth in adjusted EBITDA. Despite this major and unexpected shifts in the digital media landscape.

Charles Hanson Gillespie: We are updating our revenue guidance today to $118 to $122 million and updating our adjusted EBITDA guidance to $40 to $44 million. The midpoint of our adjusted EBITDA guidance still represents year-on-year growth of 14%. I will add that given the better long-term competitive positioning of our owned and operated website, we remain comfortable with the current consensus estimate for 2025 adjusted EBIT. This would represent approximately 25% year-over-year growth and put us more than halfway toward our goal of reaching $100 million in adjusted EBIT. Now, let me turn the call over to Elias for a view of the first quarter financial highlights.

We are updating our revenue guidance today to $118 million to $122 million and updating our adjusted EBITDA guidance to $40 million to $44 million the midpoint of our adjusted EBITDA guidance still represents year on year growth of 14%.

Speaker Change: I will add that given the better long term competitive positioning of our owned and operated websites. We remain comfortable with the current consensus estimate.

Speaker Change: For 2025 adjusted EBITDA.

Speaker Change: This would represent approximately 25% year over year growth and put us more than halfway toward our goal of reaching $100 million and adjusted EBITDA.

Speaker Change: Now, let me turn the call over to Elliot for review of the first quarter financial highlights.

Elias Mark: Thank you, Charles. Revenue of $29.2 million was a first-quarter record as we delivered more than 107,000 MDCs in Q1, up 22% compared to the year-ago period. The 9% annual revenue increase reflects growth in each of our global regions in which we operate. North American revenue, our largest market, was up 5% year over year. UK and Ireland rose 5%, other Europe grew 39%, and the rest of the world

Elias Mark: Thank you Charles.

Elias Mark: A $29 2 million was a first quarter record as we delivered more than 170000 M. D. C. In Q1 'twenty.

Elias Mark: 22% compared to the year ago period.

Elias Mark: The 9% year over year revenue increase reflects growth in each of our global regions in which we operate.

Elias Mark: North American revenue, our largest market with 5% year over year.

Speaker Change: You cannot orland rose 5%.

Speaker Change: Europe grew 39% and rest of world grew 29%.

Elias Mark: North American revenue benefited from a few weeks of operations in North Carolina following the market launch in March, but this is compared against Ohio and Massachusetts, both launching in Q1 of 2023. We closed our acquisition of FreeBets.com and related assets on April 1st, so we did not record contributions from these assets in Q1. Gross profit increased 5% or €1.3 million a year to €27 million. Total sales grew year-over-year to 2.2 million as a result of our successful ramp of the Gannett & Independence Media Partnership. On a sequential basis, our cost of sales decreased substantially as the portion of revenues from media partnerships declined from an exceptionally high Q4. Total operating expenses of 19.1 million in the first quarter of 2024 increased 9% compared to the year-ago The full year, as revenue is still expected to grow faster than total expenses. Our workforce is right-sized today, and our internal focus is very much on the ROI-focused allocation of both capital and human resources.

Speaker Change: North American revenue benefited from a few weeks of operations in North Carolina. Following the market launch in March but did this comparator games, Ohio, and Massachusetts, both launching in Q1 of 2023.

Speaker Change: We closed our acquisition of free bet they'll call and related assets on April 1st. So we did not record contributions from these assets.

Speaker Change: Gross profit increased 5% or one 3 million year over year to 27 million.

Speaker Change: Cost of sales quarters year over year to $2 2 million afterwards helped him on a successful ramp up again that independent media partnerships.

Speaker Change: Sequential basis, however caused the decrease substantially.

Speaker Change: Revenues from media partnerships declined from an exceptionally high Q4.

Speaker Change: Total operating expenses of $19 1 million in the first quarter of 2024 increased 9% compared to the year ago period to four 7% constant currency.

Speaker Change: We expect to generate operating efficiencies.

Speaker Change: Full year revenue is still expected to grow faster than total expenses.

Speaker Change: Our workforce is.

Speaker Change: Right sized state and that was a ton of both because it's very much on <unk>.

Speaker Change: Or white focused allocation, although capital and resources.

Elias Mark: Adjusted EBITDA for the first quarter of 2024 was $10.2 million compared to $10.7 million in the year-ago quarter. Q1 adjusted EBITDA margin of $0.35 rose 300 basis points on a quarterly sequential basis, consistent with the midpoint of our full-year guidance at $0.35. Adjusted net income and adjusted net income for diluted share for the first quarter of 2024 were flat at 7.5 million and 20 cents, respectively, compared to two years ago.

Speaker Change: Adjusted EBITDA for the first quarter of 2020 for $10 2 million compared to $10 7 million in the year ago quarter.

Speaker Change: Q1, adjusted EBITDA margin of 35% Rose 300 basis points on a quarterly sequential basis consistent with the midpoint of our full year guidance of 35%.

Speaker Change: Adjusted net income and adjusted net income per diluted share for the first quarter of 2024 flat at $7 5 million and 20 patents, respectively compared to year ago period.

Elias Mark: Free cash flow increased 32% in the quarter to $8.2 million as we converted 28% of revenue and 81% of adjusted EBITDA to free cash. During the first quarter, we continued to repurchase shares, buying approximately 329,000 ordinary shares at an average price of $9.10, with a total consideration of approximately $3 million. At the end of Q1, we had approximately 3.9 million left on our existing share buyback optimization. In May, the board approved an expansion of the share buyback program by authorizing an additional 10 million.

Speaker Change: Free cash flow increased 32% in the quarter to $8 2 million as we come out to 28% of revenue and.

Speaker Change: 81% of adjusted EBITDA did pretty attachment.

Speaker Change: During the past quarter, we continued to repurchase shares buying approximately 329000 ordinary shares at an average price of <unk>.

Speaker Change: $9 10.

Speaker Change: Total consideration of approximately $3 million.

Speaker Change: At the end of Q1, we had approximately $3 9 million left on our existing share buyback authorization.

In May the board approved an expansion of the share buyback program by authorizing an additional $10 million.

Elias Mark: Cash, as of March 31st, totaled $25.3 million, flat quarter-on-quarter, reflecting very strong operating cash flow offset by share repurchases and the final preferred consideration payment for the acquisition of Road to Wire of $5 million. At the beginning of Q2, we paid a first instalment of $20 million for the acquisition of Freebet.com and related assets, financed by cash on hand and a $60 million drawdown from our $50 million credit facility. At the end of April, we made a final deferred consideration payment for the acquisition of Bonus Finder of $13.4 million using cash on hand.

Speaker Change: Cash as of March 31st couple of $25 3 million last quarter on quarter, reflecting very strong operating cash flow offset by share repurchases and the final deferred consideration payment for the acquisition of Rosewater are five minutes.

Speaker Change: At the beginning of Q2, we paid the first installment of $20 million for the acquisition of fleet that buckhorn unrelated.

Speaker Change: Unrelated assets financed by cash on hand, and 60 million go down another 50 million credit facility.

Speaker Change: At the end of April we'll make it final deferred consideration payment for the acquisition of bonus find our starting point 4 million using cash on hand.

Elias Mark: Despite now expecting substantially less revenue from our media partnerships and expecting no third estate launches outside of North Carolina in 2024, compared to three launches in 2023, we are well on our way to deliver overall revenue growth and strong growth in adjusted EBITDA for 2020. Our updated guidance is for revenue in the range of $118 to $122 million and adjusted EBITDA in the range of $40 to $44 million. Our previous guidance contemplated a cost of sales of 10 million in 2024.

Speaker Change: Despite now expecting substantially less revenue from our media partnerships unexpected metals cargo state launches outside of North Carolina in 'twenty 'twenty four compacted cleaned onto 2023.

Speaker Change: We are well on our way to deliver overall revenue growth strong growth in adjusted EBITDA for 2024.

Speaker Change: Our updated guidance is for revenues in the range of 118 to 122 million.

Speaker Change: Adjusted EBITDA in the range of 40 to 44 million.

Speaker Change: Our previous guidance contemplated cost of sales of $10 million from 2024.

Elias Mark: The vast majority of cost of sales represents fees paid to media partners. We now expect the cost of sales to be approximately $4.8 million for the full year, of which $2.2 million was incurred in Q1. The guidance does not include any contribution from additional acquisitions other than the already closed acquisition of FreeBets.com and related assets and assumes an average EURTUSD exchange rate of 1.09 throughout 2020. As Charles highlighted before, our expectations for 2025 adjusted EBITDA have not changed. Put up, I will come back to Charles.

Speaker Change: The vast majority of cost of sales reps since piece paint to media partners.

Speaker Change: We now expect cost of sales to be approximately $4 8 million for the full year of which $2 2 million wasn't cut in Q1.

Speaker Change: The guidance does not include any contribution from additional acquisitions.

Speaker Change: How does that feel ready chose acquisition of free bets protocol and related assets and assumes an average euro to U a E change rate of 1.09 throughout 2024.

Speaker Change: As Charles highlighted before our expectations for 2020 five adjusted EBITDA has not changed.

Speaker Change: With that I will come back to Chuck.

Charles Hanson Gillespie: Thank you, Elias. We are pleased to be off to a strong start in the year, which sets up the company to deliver growth year on year in 2020. Despite the headwinds we face near term to immediate partnership revenue, I expect the company to continue to take market share in North America and elsewhere. I'd like to thank our sensational team for delivering a great Q1 and for positioning the company for continued growth in 2024. Operator, we are happy to open up the line for questions.

Chuck: Thank you I always.

Chuck: We are pleased to be off to a strong start of the year, which sets up the company to look to deliver a growth year on year in 2024, despite that headwind, we face near term to a media partnership revenue I expect the company to continue to take market share in North America and elsewhere.

Chuck: I think our sensational team for delivering a great Q1.

Speaker Change: Positioning the company for continued growth in 2024, operator, we are happy to open up the line for questions.

Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question area.

Speaker Change: At this time, we'll 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 line is in the question queue. You May Press Star two if you would like to remove your question from the queue. We ask that you limit your questions to one and a follow up so.

Operator: You may press star 2 if you would like to remove your question from the queue. We ask that you limit your questions to one and a follow-up so that others may have an opportunity to ask questions. You may re-enter the queue by pressing star one. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: And that others may have an opportunity to ask questions.

Speaker Change: You may reenter the queue by pressing star one.

Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we poll for questions. Our first question comes from David Bain with B. Reilly Securities. Please proceed with your question.

Speaker Change: Please while we poll for questions.

Speaker Change: Our first question comes from David Bain B Riley Securities. Please proceed with your question.

Charles Hanson Gillespie: Great, thank you. Charles and Elias, just for clarification, I think you were pretty clear, but Google's new treatment of legacy media does not impact how you view 2025 from the lens of consensus estimates. Did I understand that correctly?

David Bain: Great. Thank you Charles and I only ask just just for clarity.

Speaker Change: You were pretty clear, but google's new treatment of legacy media does not impact how you view 2025 from the lens of consensus estimates that I understand that correctly.

Charles Hanson Gillespie: Yeah, from the lens of consensus, EBITDA revenue would be... We're not going to drive as much revenue without media partnerships, but the profitability of the business, ex-media partnerships, is... is even better. So we're very comfortable where the street is at in terms of EBITDA for 2025.

Speaker Change: Yeah from the lens of a consensus EBITDA.

Speaker Change: Revenue would be.

Speaker Change: We're not going to drive as much revenue without media partnerships, but the profitability of the business X media partnerships is is even better so.

Speaker Change: We're very comfortable where the street is at in terms of EBITDA for 2025.

Charles Hanson Gillespie: Perfect. And Charles, you know, I'd love to follow up on the $100 million EBITDA milestone target. If you could help us, a little bit more of the pathway of how to get there, the primary catalysts or assumptions you're using, underlying TAM growth, new acquisition percentage, anything specific, and big picture thoughts on timing.

Speaker Change: Perfect.

Speaker Change: And Charlie you know love to follow up on the $100 million EBITA milestone target. If you could help US you know a little.

Speaker Change: More of the pathway of how to get there the primary catalyst sort of assumptions, you're using underlying Tam growth new acquisitions percentage anything specific and big picture thoughts on timing that'd be awesome.

Charles Hanson Gillespie: Got it. Well, with $42 million in EBITDA expected for full year 2024, according to the midpoint of our updated guidance. We would only need to continue to grow organically at a low-ish CAGR in the mid-teens for a few years and add on a bit of extra scale through additional M&A to get there in the medium term. We have widened the aperture in terms of what we are considering from an M&A perspective and are no longer only looking at SEO-driven gambling affiliate businesses.

Charlie: You got it.

Speaker Change: With 42 million in EBITDA expected for full year 2024, according to the midpoint of our updated guidance.

Speaker Change: We would only need to continue to grow organically at a low ish CAGR in the mid teens for a few years and add on a bit of extra scale through additional M&A to get there in the mid term.

Speaker Change: We have widened the aperture in terms of what we are considering from an M&A perspective and are no longer only looking at SCO driven gambling affiliate businesses.

Charles Hanson Gillespie: There's a wide universe of technology for us companies in the online gambling ecosystem, companies that are serving our same clients and end users that fit into our culture of driving high growth with high margins. For example, we are considering businesses that drive traffic and value for our B2B online gambling operator clients through channels other than SEO, and we are increasingly considering businesses which have highly predictable subscription revenue, like the Rotowire acquisition, where we have grown revenue by over 50% since buying the company.

Speaker Change: There's a wide universe of technology first companies in the oil and gambling ecosystem are companies, which are serving our same clients and end users that fit into our culture of driving high growth with high margins.

Speaker Change: For example, we're considering businesses with strikes traffic and value for our.

Speaker Change: B to B online gambling, operator clients with channels other than SCO, and we are increasingly considering businesses, which have highly predictable subscription revenue.

The roto wire acquisition, where we have grown revenue by over 50% since buying the company.

Operator: Okay, very helpful. Thank you.

Speaker Change: Okay very helpful. Thank you.

Speaker Change: Yeah.

Operator: Our next question comes from Jess Stiefel. Please proceed with your question.

Speaker Change: Our next question comes from Jeff <unk> with Stifel. Please proceed with your question.

Charles Hanson Gillespie: Great morning, Charles. Elias, thanks for taking our questions. Maybe starting off on the Google update and the related impact to your guidance, I guess, I mean, I think we're only about a week into results here, but Charles, just curious if you're seeing evidence thus far of traffic shifting into your 100% margin-owned affiliate sites and sort of away from the media partnerships. And as a follow-up to that, if you just contrast the guidance revisions to Elias, the comments you made on cost of So can you just expand on that as well, if I'm reading that correctly? Thanks.

Speaker Change: Great. Good morning, Charles Thanks for taking our questions.

Speaker Change: Maybe starting off on on the Google updated and the related impact to your guidance I guess I mean I.

Speaker Change: I think there's only about a weekend of well results here, but Charles just curious if you're seeing evidence thus far of.

Speaker Change: Traffic shifting into your <unk>.

Speaker Change: Per cent margin owned affiliate sites and sort of away from the media partnerships and as a follow up to that if you know if you just contrast, the guidance revisions.

Speaker Change: Two Italians the comments you made on on cost of sales guidance. It seems to me there isn't much of an impact or much of a benefit baked into 'twenty towards for guidance for <unk>.

Speaker Change: Potential uplift to your own site. So that's traffic redirect so can.

Speaker Change: Can you just expand on that as well if I'm, if I'm reading that correctly. Thanks.

Speaker Change: Thanks, Jeff.

Charles Hanson Gillespie: Thanks, Jeff. The first part of the question was, Have we seen an impact, a positive impact, on our own and operated assets? And we have, you know, that change started immediately. We have seen an increase in share of voice and improved search visibility across multiple of our key assets. The way you should think about this is that we... You know, we run a precision machine, and when something changes like this... We need to recalibrate that machine.

Speaker Change: The first part of the question was.

Speaker Change: Have we seen an impact a positive impact on our owned and operated assets and we have you know that.

Speaker Change: That change started immediately.

Speaker Change: We have seen an increase in share of voice and an improved search visibility across multiple of our key assets.

Speaker Change: The way you should think about this is we.

Speaker Change: You know, we run a precision machine and when something changes like this we need to recalibrate that machine.

Charles Hanson Gillespie: And that takes a little bit of time, but once we do that, we will start to get better clarity into exactly where and how much of a tailwind this is. It is absolutely a tailwind, you know; it's very positive.

Speaker Change: And that takes a little bit of time, but once we do that we.

Speaker Change: We will start to get better clarity into exactly where and how much of a tailwind. This is yeah. It is absolutely a tailwind you know, let's say, it's a very positive.

Charles Hanson Gillespie: Long-term development. But, of course, we have optimized ourselves to help our media partners. That has been the strategy that has been most effective for ourselves and many of the other large performance marketing companies in the industry. We're confident, based on the data that we have seen, that we will be able to achieve our updated guidance, which still has year-on-year adjusted EBITDA growth of 14% at the new midpoint.

Speaker Change: Long term development, but of course, we have optimized ourselves to help our media partners that has been.

Speaker Change: The strategy that has been most.

Speaker Change: Most effected for ourselves and in many of the other.

Speaker Change: A large performance marketing companies in the industry.

Speaker Change: You know, but we're we're confident based on the data that we have seen are that.

Speaker Change: We will be able to achieve our updated guidance, which which still has year on year adjusted EBITDA growth of 14% at the midpoint.

Charles Hanson Gillespie: And then maybe zooming out a little bit, but still staying on the same topic, I guess, how does this change affect your views of media partnerships and your strategy there, you know, if at all, and if it does, can you just remind us sort of the contract length time with the various partners? Thanks.

Speaker Change: That's perfect. Thanks for that color, Charles and then maybe zooming out a little bit but staying on the same topic I guess, how does this change.

Speaker Change: Effect.

Speaker Change: Your views of a media partnerships and your strategy there.

Speaker Change: If at all and if it does can you just remind us sort of contract length time with with with the various partners. Thanks.

Charles Hanson Gillespie: Yeah, so. These media partnerships aren't going to zero, they're not going away. We remain committed to all of our partners, and our media partnerships have been a net positive that has driven incremental EBITDA for us. And that's how we optimize this business. We're trying to drive incremental even though they will be diminished. It's not going to be anywhere near as big. A portion of our business or I think, you know, and I think the changes you'll see with us are going to be the same across the board for all manner of companies which have cut deals in the same way that we have. But it's not, it's not going away.

Speaker Change: Yeah. So.

Speaker Change:

Speaker Change: Yeah.

Speaker Change: These media partnerships, they're not going to zero, they're not they're not going away.

Speaker Change: We remain.

We remain committed to all of our partners.

Speaker Change: And media partnerships.

Speaker Change: <unk> had been a net positive.

Speaker Change: Incremental EBITDA for us.

Speaker Change: And that's that's how we optimize this business, we're trying to drive incremental EBITDA, but.

Speaker Change:

Speaker Change: They will be diminished, it's not going to be anywhere near as big of.

Speaker Change: A portion of our business or I think you know what I.

Speaker Change: What the changes you'll see with us is going to be the same across the board for all manner of the companies, which has cut deals in the same way that we have.

Speaker Change:

Charles Hanson Gillespie: You know, we were, and we have chosen to be very picky about who we partner with. And we've made a real commitment to the people we partner with, and we intend to support them and help them navigate these changes and still maximize the business opportunity between the two companies. We have, generally speaking, tried to sign up folks on long-term deals, but we have cut deals which we're happy with. Grp. We don't, at this time, have any concerns about these partnerships going forward and how profitable they will be and whether it makes sense for us.

Speaker Change: But it's not it's not going away we were.

Speaker Change: We have chosen to be very picky on who we partner with and we've made a real commitment to the people, we partner with and we intend to support them and help them.

Speaker Change: Navigate these changes and still maximize the business opportunity between the two countries we have generally speaking.

Speaker Change: Tried to sign up a focus on long term deals, but we have cut deals, which we're happy with and we.

Speaker Change: We don't we.

Speaker Change: We don't.

Speaker Change: At this time have any concerns about.

Speaker Change:

Speaker Change: These partnerships going forward.

Speaker Change: And.

Speaker Change: How profitable that it would be.

Speaker Change: Whether it makes sense for us.

Operator: Great, thanks very much. I'll pass it on.

Great. Thanks, very much I'll pass it on.

Operator: Our next question comes from Barry Jonas with True Securities. Please proceed with your question.

Speaker Change: Our next question comes from Barry Jonas of Trust Securities. Please proceed with your question.

Operator: Hey guys, this is Rameen Zobanian for Barry. Thanks for taking our question. You mentioned in your opening remarks that your media partners may have some kind of avenues to push back against some of the Google methodology changes. Can you talk about some details on what that might look like?

Speaker Change: Hey, guys. This is a remains a body on for Barry Thanks for taking our question.

Speaker Change: You mentioned in your opening remarks that your media partners. Maybe you know may have some kind of avenues to push back against against some of the Google methodology changes can you can you talk about you know some details on what the what that might look like.

Charles Hanson Gillespie: Yeah, I don't want to speak for our media partners because, of course, they're, you know, their own businesses, but [inaudible] Bring this policy up to date, change the implementation of the policy, speak to Google, call anyone they can to try to better understand what the intent is, www.google.com There may be. They may walk back some of this at the margins, but I think, generally speaking, that the overall opportunity for our partners in the media partnership world is simply going to be less than it was before.

Speaker Change: Yeah, I don't want to speak for our media partners because of course, there you know their own businesses, but.

Speaker Change:

Speaker Change: It did.

Speaker Change: These changes are a bigger headwind for.

Speaker Change: For our partners than they are for us. So it's entirely logical that theyre going to do whatever they can to try to.

Speaker Change: Bring these.

Speaker Change: Update this policy change the implementation of the policy speak to Google.

Speaker Change: You know call it call anyone they can to try to.

Speaker Change: You know better understand what what the intent is and you know what.

Speaker Change: They can convince them that they've gone too far.

Speaker Change: Yeah, Google as the Supreme Court or the Internet and there is it's very good you can't appeal.

Speaker Change: You know, we we think these changes are.

Speaker Change: Largely here to stay but there may be.

Speaker Change: There may be.

Speaker Change: They may walk back some of this at the margins, but I think generally speaking that the the overall opportunity.

Speaker Change: Our partners in the media partnership World is it.

Speaker Change: We're going to be less than it was before.

Charles Hanson Gillespie: Got it. Makes sense. Now, just shifting over to free bets a little bit. Now that you've had some time under the hood, can you talk about how the integration is proceeding and maybe any incremental synergy opportunities you've identified following the acquisition?

Speaker Change: Got it makes sense and then just shifting over to to free bets a little bit not now that you've had some time under the hood.

Speaker Change: Can you talk about how the integration is proceeding and maybe any incremental synergy opportunities you've identified following the acquisition.

Speaker Change: Sure.

Charles Hanson Gillespie: Everything thus far has gone to plan. We closed as expected on April 1st, and we have had control of the assets for over a month at this stage. We are focused on integrating these new assets into our technology systems and operating processes. We have also onboarded a number of new staff members and are likewise integrating them into our culture and teams. It remains super early for this new chapter for these assets, but we have more confidence than we have ever had that we will be able to realize substantially improved operating performance for these websites in the medium and long term.

Speaker Change: Everything thus far has gone to plan, we closed as expected on April 1st and we have had control of the exits for over a month at this stage.

Speaker Change: We are focused on integrating these new assets into our technology systems and the operating processes.

Speaker Change: We have on boarded a number of new staff members and are likewise integrating them into our culture and teams.

Speaker Change: It remains super early for this new chapter for these assets, but we have more confidence than we have ever had that we will be able to realize substantially improved operating performance.

Speaker Change: For these websites in the medium and long term.

Charles Hanson Gillespie: Just to add a bit of color on the deal itself, with no additional new state launches expected in the U.S. until sometime in 2025, growth in the region will naturally moderate. Therefore, we made a strategic decision last year to prioritize growth this year in a portfolio of assets outside the U.S. And these assets monetize some of the most evergreen and consistent online gambling markets in the world. So we are confident that this deal has dramatically improved our competitive positioning and given us better market share in some of the world's most desirable online gambling markets.

Speaker Change: Just to add a bit of color on the deal itself with no additional new state launches is expected in the U S until sometime in 2025.

Speaker Change: Frozen the region will will naturally moderate.

Speaker Change: Therefore, we made the strategic decision last year surprised prioritize growth this year.

Portfolio of assets outside the U S. A and these assets they monetize some of the most evergreen and consistent online gambling markets in the world.

So we are confident that this deal has has dramatically improved our competitive positioning.

Speaker Change: And given us a better market share in some of the world's most desirable.

Speaker Change: Online gambling markets.

Operator: Great. Thanks so much for that, Colin. I appreciate it.

Speaker Change: Great. Thanks, so much for that color I appreciate it.

Yeah.

Operator: Our next question comes from David Katz with Jeffreys. Please proceed with your question.

Speaker Change: Our next question comes from David Katz with Jefferies. Please proceed with your question.

Operator: Morning, everyone. Appreciate you taking my question. Just doubling back on some of the earlier commentary about your owned sites, there were a couple of questions about that. Are you able to sort of quantify or put some benchmarks around or some boundaries or, you know, qualitatively or quantitatively sort of what that traffic improvement is so far and what it might become? And then I have a follow-up.

David Katz: Good morning, everyone.

I appreciate you taking my questions.

David Katz: Just doubling back on some of the earlier commentary about your owned sites.

Speaker Change: It's been a couple of questions about it or are you able to sort of quantify or put some brackets around or some boundaries are.

Speaker Change: Qualitatively or quantitatively.

Speaker Change: What the traffic improvement is so far.

Speaker Change: Got it might become and then I have a follow up.

Charles Hanson Gillespie: Hey, David, we operate a portfolio. So every site is different. Some sites have seen more increases in share of voice and positioning than others. Rotowire is looking quite good. Gambling.com is looking good.

Speaker Change: Hey, David it's.

Speaker Change: We were operated portfolio. So every site is different some sites have seen more increases in share of voice and positioning that others are roto wires looking quite good.

Speaker Change: Gambling dot coms looking good but you know we're at the beginning of the part of the year, which is the seasonally slowest part of the year for us so.

Charles Hanson Gillespie: But you know, we're at the beginning of the part of the year, which is the seasonally slowest part of the year for us. So, you know, as you look at the, you know, as you look at the KPIs coming in, traffic, referrals, etc. You know, it's, it's. It's trending in the direction that you would expect. It all gives us a nice overview, and we'll be in a position to, of course, update that. And hopefully improve it as we gain more clarity about the magnitude of the new tailwind that we have, which is not trivia.

Speaker Change: Look at the the the you know as you look at the Kpis coming in traffic referrals et cetera.

Speaker Change: It's.

Speaker Change: It's it's trending in the direction that you would expect and you know.

Speaker Change: It all.

Speaker Change: Gives us a nice.

Warm fuzzy feeling but it's it's it's not given the time of year and the overall level of seasonality, it's difficult to draw precise conclusions about what that means exactly for the rest of the year. Therefore, we have taken a.

Speaker Change: A conservative.

Speaker Change: View on.

Speaker Change: Our guidance for the rest of the year and.

Speaker Change: And we'll be in a position to of course update that in.

Speaker Change: And hopefully improve it as we gain more clarity about the magnitude of the new tailwind that we have which is <unk>.

Speaker Change: Which is not trivial.

Speaker Change: Got it.

Charles Hanson Gillespie: Okay. That'll do for now. With respect, Charles, to the earlier commentary about sort of refocusing some of your M&A lenses, can you, and I ask this all the time, can you help us sort of put some boundaries around, you know, size, you know, type, and just help us understand what that new field of play really is? And, you know, size obviously being really important.

Speaker Change: Okay.

Charles Hanson Gillespie: That'll do for now with respect Charles to the earlier commentary about sort of refocusing some of your M&A.

Speaker Change: Lenses.

Speaker Change: And you and I asked this all the time can you can you help us sort of put some boundaries around size type.

Speaker Change: Just help us understand what that new field of play.

Speaker Change: Really is and you know size, obviously being really important.

Speaker Change: Yeah I think.

Charles Hanson Gillespie: Yeah, I think you can safely assume that anything we do will be in the online gambling industry. Of course, the online gambling affiliates out there are, you know, always an option, but increasingly, our heads are, We want to build a business that has highly predictable revenue, and therefore, prioritizing M&A, from the perspective of businesses that have highly predictable revenue, is a priority. But we're not going to do something completely left field, of course.

Speaker Change: No.

Hugh: Hugh you can safely assume that anything we do will be mainly online gambling industry.

Speaker Change: Hum.

Speaker Change: Of course, the online gambling affiliates out there are you know.

Speaker Change: Louis is an option but.

Speaker Change: But increasingly our heads are.

Speaker Change: In a different place we want to build a business, which has highly predictable.

Speaker Change: Revenue.

Speaker Change: And therefore prioritizing M&A from the perspective of our businesses, which have highly predictive predictable revenue.

Speaker Change: He is a priority, but we're not going to go do something completely left field of course, so anything we would do would have some sort of connection into.

Charles Hanson Gillespie: So anything we would do would have some sort of connection to gambling affiliates, some sort of synergy, some sort of adjacency, and ability to perhaps bolt on our model to other assets or at least share expertise, content, quality, knowledge, data, etc. in a way where there's some legitimate one plus one is more than two situation in terms of size.

Speaker Change: Yeah, when you affiliate some sort of synergy no some sort of adjacency and our inability to perhaps bolt on our model to other assets.

Speaker Change:

Or at least share.

Speaker Change: Expertise content quality knowledge data et cetera in a way where there's some.

Speaker Change: Legitimate one plus one is more than two situations.

Speaker Change: In terms of size.

Speaker Change: Okay.

Charles Hanson Gillespie: Sorry, please finish. That's where I was going to follow up. Continue.

Speaker Change: So we just finished that's where I was going to follow up keep going sorry.

Charles Hanson Gillespie: In terms of size, you know, we've always said kind of bigger is better. The same amount of work to do a $20 million deal as it is to do a $100 million deal. So $100 million companies tend to have better management, a deeper bench of talent, a more sophisticated financial process, better organization, and cleaner forecasting. So why not just do the $100 million deal? We're not at all interested in issuing any shares at the current level, as I'm sure you can appreciate, but nevertheless, we are keen on growing this business through M&A, and look, we have our new $50 million debt facility with Wells Fargo. They're great partners, and it would be possible to arrange additional debt beyond that $50 million with Wells. We had a clear use for the proceeds.

Speaker Change: In terms of size you know, we've always said kind of bigger is better.

Operator: Understandable. That's what I was looking for. Thank you.

Speaker Change: It's the same amount of work to do with $20 million deal as it is to do 100 million dollar deal. So $100 million companies tend to have better management deeper bench of talented more sophisticated financial process better organized queen or forecasting so why not just do the 100 million deal.

Speaker Change: You know we're not at all interested in issuing any shares at the current level as I'm sure you can appreciate.

Speaker Change: But nevertheless, Ah we you know we are keen on on growing this business through M&A and look we have our new $50 million debt facility with Wells Fargo.

Speaker Change: Well, it's been great partners and.

Speaker Change: You know it it's it would be possible to.

Speaker Change: Arrange additional debt beyond that $50 million with wells if.

Speaker Change: We had a clear use of proceeds.

Speaker Change: That's what I was looking for thank you.

Speaker Change: Yeah.

Operator: Our next question comes from Chad Van with Macquarie. Please proceed with your question.

Speaker Change: Our next question comes from Chad Beynon with Macquarie. Please proceed with your question.

Operator: Morning gentlemen, thanks for taking my question. With the updated revenue guidance of 10% year-over-year growth, can you help us think about the geographical breakdown of that 10%? Obviously, historically, North America has been expected to grow significantly higher than the UK and I, but post these Google changes, do you have an updated view on what the regions could look like? Thanks.

Chad Beynon: Good morning, gentlemen, thanks for taking my question with the updated revenue guidance of 10% year over year growth can you help us think about the geographical breakdown of that 10% I know historically, obviously north America has been expected to grow.

Chad Beynon: Significantly higher than the U K and I, but post these Google changes do you have an updated view on what the regions could look like thanks.

Speaker Change: Hey, Chad.

Elias Mark: In the first quarter, we grew in all geographies; revenue from other Europe accounted for 13% of revenue and grew 39%. The rest of the world was 5% of revenue, and we're at 29%. We expect other European countries and the rest of the world to continue to demonstrate strong growth this year. And for North America and the UK and Ireland, we expect the impact on media partnership revenue as a result of these Google changes to dampen 2024 growth.

Speaker Change: In the first quarter, we grew in all geographies revenue from other Europe accounted for 13% of revenue and grew 39%.

Speaker Change: Rest of World was 5% of revenue and grew 29%.

Speaker Change: We expect other Europe and the rest of the World will continue to demonstrate strong growth this year.

Speaker Change: And for North America and in the U.

Speaker Change: And in Ireland, we expect the impact on media partnership revenue.

Speaker Change: As a result of these Google changes to to dampen 2024 gross.

Elias Mark: Our guidance assumes that North Carolina will still be the only state in 2024 compared to three state launches in 2023. So, you know, if you look at it on a kind of like for like basis, there's still quite substantial growth in North America. But in aggregate, growth rates are going to come down as a result of the Change in Revenue from Media Partnerships.

Speaker Change: Our guidance assumes that North Carolina, it will still be the only state in 2024 compared to three state launches in 2023. So if you. If you look at it on a kind of a like for like basis. There is still quite substantial growth in.

Speaker Change: North America.

Speaker Change: But in aggregate our growth rates are probably going to come down as a result of the.

Speaker Change: Change in revenue.

Speaker Change: Revenue from media partnerships.

Charles Hanson Gillespie: Okay, that makes sense. Thank you. And then, Charles, you've noted that you're agnostic between CPA and RevShare with some of the U.S. shift or the market share shifts moving up to the top two. Is there any view in terms of what the other tiers of operators would like to work with you guys, CPA, RevShare, if there's any change in terms of how we're thinking about that for 24, 25 or just generally speaking Thanks. Yeah, yeah. Like my perspective on on the

Speaker Change: Okay makes sense. Thank you and then [noise] Charles you've noted that you're agnostic between CPA and Rev share with some of the U S shift or the market share shifts moving up to the top two.

Speaker Change: Is there any view in terms of what the other tiers of operators, how they would like to work with you guys see P. A rev share.

Charles Hanson Gillespie: If there's any change in terms of how we're thinking about that for 'twenty four 'twenty five or just you know generally speaking in your conversations with them. Thanks.

Speaker Change: Yeah.

Speaker Change: Yeah Yeah.

Charles Hanson Gillespie: Yeah, yeah, like my perspective on the operators in the US. With fewer state launches, operators have more bandwidth than they did previously. And therefore, they're drilling into their businesses more deeply than they did before. This means that they're reviewing marketing performance more scientifically.

Like my my perspective on on the operators in the U S.

Speaker Change: With fewer state launches operators have more bandwidth than they did previously.

Speaker Change: Therefore, their drilling into their businesses more deeply than they did before.

Speaker Change: This means that they're reviewing marketing performance more scientifically.

Charles Hanson Gillespie: And we expect that to continue to show that the Affiliate Channel delivers some of the most consistent and straightforward ROI in the industry. I'd expect operators to continue to spend and invest in the way they are now until we see more iGaming states come online, which will increase player LTVs and catalyze more aggressive spending across all channels. A lot of U.S. operators, especially on the bigger ends, still have hundreds of millions in sponsorship commitments.

Speaker Change: And we expect that that will continue to show that the affiliate channel deliver some of the most consistent and straightforward ROI in the industry.

Speaker Change: I'd expect operators to continue to spend and invest in the way. They are now until we see more I gaming states come online.

Speaker Change: Which will increase player ltvs and catalyze more aggressive spending across all channels.

Speaker Change: A lot of the of the U S operators, especially.

Speaker Change: On the bigger end.

Speaker Change: They still have hundreds of millions in the sponsorship commitments that they signed up for at the beginning of the sports betting boom and these are only rolling off gradually.

Charles Hanson Gillespie: That they signed up for at the beginning of the sports betting boom, and these are only rolling off gradually. Uh, and I expect that, as those roll off. The substantial budget will be freed up, and that will come our way. So, A lot of these sponsorships, not all of them, but a lot of them are low or no ROI endeavors, and I think that the experimentation phase is over, operators understand where they're seeing return. Generally speaking, it's not on the sponsorships.

Speaker Change: And I expect that.

Speaker Change: As those roll off.

Speaker Change: A substantial budget will be freed up.

Speaker Change: And that will come our way so.

Speaker Change: There's a lot of these sponsorships not all of them, but a lot of them are are low or no ROI endeavors, and I think that.

Speaker Change: The experimentation phase is over.

Speaker Change: Operators understand where they're seeing returns generally speaking it's not on the sponsorships.

Charles Hanson Gillespie: And they will, you know, there are hundreds of millions; it's going to free up. And I think that that's going to ultimately result in a much more aggressive posture from some of the operators, in kind. On the demand side, more and more people are coming into the industry for the first time, and the TAM therefore continues to grow, even without any material changes to the operator base.

Speaker Change: And they will.

Speaker Change: There's hundreds of millions, it's going to free up and I think that that's going to ultimately result in a.

Speaker Change: Much more aggressive posture from some of the operators.

Speaker Change: In time.

Speaker Change: On the demand side, you know more and more people are coming into the industry for the first time in the Tam. Therefore, it continues to grow.

Speaker Change: Even without any material changes to the operator mix.

Speaker Change: Thank you I appreciate it.

Speaker Change: Okay.

Operator: As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. Our next question comes from Ryan Sigdahl with Craig Column. Please proceed with your question.

Speaker Change: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad. Our next question comes from Ryan Sigma with Craig Hallum. Please proceed with your question.

Charles Hanson Gillespie: Hey guys, curious, just kind of on the media property saying there, but curious what percentage of leads on those media properties were direct to the website thinking of the millions of loyal viewers they have for other content and then cross-promoting them versus going to Google and basically leveraging that domain to get to the affiliate pages on, say, USA Today?

Speaker Change: Hey, guys.

Ryan Ronald Sigdahl: Curious just kind of on the media property, saying, there, but curious what percentage of leads on those media properties, where direct to the website thinking of the millions of loyal viewers. So they have for other content and then cross promoting them versus going to Google and basically leveraging that that domain to get to the affiliate pages answer.

Speaker Change: USA today.

Charles Hanson Gillespie: Yeah, it's a good question. You know, we use the phrase "high intent" a lot, and that's a key phrase because it really tells you everything you need to know. If somebody goes to Google and searches for something, it's high intent. They really want it. Not only do they want it, but they want it right now. And the fact that they want it right now is kind of... People that have come through our media partners and signed up for online gambling sites, you know, these are people that would have used these sites in the normal course of business, but in a particular customer journey where they are converting into a new depositing customer, they are very, very highly likely to have come through a search engine.

Speaker Change: Yeah, It's a good question.

Speaker Change: You know we use the phrase high intent a lot and and and that's that's a key phrase because it really tells you everything you need to do.

You know if somebody goes to Google and searches for something Italians that they really wanted that not only do they want it when they want it right now and that the fact that they want it right now is kind of important part you know a lot of these.

Charles Hanson Gillespie: So, you know, these media partnerships will no doubt shift away from that. And, you know, moving forward, I think we'll be looking from both sides to help them in all the ways we possibly can. But, you know, the big driver of this whole thing had been searching, and I

Speaker Change: People that have come through our media partners and signed up for.

Speaker Change: For online gambling sites you know these are people that would've used these sites in the normal course of business, but.

And if you take the customer journey, where they are are converting into a new deposits in customer. They are very very highly likely to have come through a search engine. So.

Speaker Change: These media partnerships will no doubt shift away from that.

Speaker Change: Level of search focus and our focus on high intent. There are of course other ways for us to help our partners monetize their existing audiences, which are incredibly sizeable.

Speaker Change: And I you know moving forward I think we'll be we'll be looking.

Speaker Change: From both sides to to help them and and all the ways, we possibly can.

Speaker Change: But the big driver of this whole thing has has been search and in hindsight.

Elias Mark: Good. Then just on guidance, using your cost of sales assumptions that you gave the previous quarter and now, it implies all of the revenue or almost all of it, guidance revisions from the media properties. I guess, is that correct?

Speaker Change: Good and then just on guidance using your cost of sales our assumptions that he gave previous quarter now it implies all of the revenue or almost all of it guidance revisions from the media properties. I guess is that correct and then to confirm I guess that implies that you aren't assuming any incremental benefit to.

Speaker Change: Your own domains, even though you've started to see kind of early signs of that.

Speaker Change: Yeah.

Elias Mark: It's a fair assumption. We don't take away all of our media partnership revenue for the remainder of the year, but a very big proportion. And like Charles said before, we are conservative in our assumptions for the underlying growth in our owned and operated sites, but we see some early signs of it. We expect that to happen in the midterm, but it's, We need to kind of recalibrate the portfolio, and it takes a little bit of time. So we don't expect in our guidance a significant effect in 2024 that we are increasingly confident about Stormy's Underlying Goal for 2025.

Ryan Ronald Sigdahl: Yeah, Ryan it's it's it's.

Speaker Change: It's a far assumption, we don't take away or allow our media partnership revenue. When a reminder of the air but that's a very big proportion.

Speaker Change: And like Charles said before we are conservative in our assumptions for.

Speaker Change: The underlying growth in our owned and operated sites, we see some early signs of it.

Speaker Change: We expect that to happen in the meantime that it.

Speaker Change: We need to recalibrate.

Speaker Change: Recalibrate that portfolio and it takes a little time on say we.

Speaker Change: We don't.

Speaker Change: Expect.

Speaker Change: In our guidance a significant effect in 2024.

Speaker Change: We are increasingly confident about.

Speaker Change: Strong underlying go forward for 2020 one.

Operator: Very good. Thanks guys. Good luck.

Speaker Change: Very good thanks, guys. Good luck.

Operator: Our next question comes from Clark Lampen with BTIG. Please proceed with your question.

Speaker Change: Our next question comes from Clark Laughing with B P. I G. Please proceed with your question.

Operator: Thanks. Good morning. I've got two.

Speaker Change: Thanks, Good morning, I've got two I wanted to start with on the earlier comments around consensus EBITDA you mentioned, you're comfortable with this sort of mid fifties mark for for twenty-five if we're thinking about I guess bridging from the midpoint that we're seeing this year around 42 to that 55 next year. However, you guys are comfortable at this stage.

Charles Hanson Gillespie: I wanted to start with the earlier comments around consensus EBITDA. You mentioned you're comfortable with this sort of mid-50s mark for 25. If we're thinking about, I guess, bridging from the midpoint that we're seeing this year around 42 to that 55 next year, however you guys are comfortable at this stage, understanding that you're not giving formal guidance, help us understand, I guess, that bridge, sort of implied EBITDA growth of around 31% versus top-line trends that are currently running in sort of the 10% ballpark.

Speaker Change: And you're not giving formal guidance.

Speaker Change #100: Help us understand I guess that that bridge you now in sort of implied EBITDA growth of around 31% versus top line trends that are currently running in sort of a 10% ballpark.

Charles Hanson Gillespie: And then question two, Charles, just on the performance marketing backdrop, you mentioned channel ROIs still healthy, you're taking share, and competitors are also experiencing challenges. Why widen, I guess, the aperture right now, as you said, and start committing capital elsewhere rather than maybe drilling down organically on the core if the sort of thesis is unchanged? Has the view, I guess, around the sort of medium-term opportunity there changed in any way? Thank you.

And then question two Charles just on the performance marketing backdrop, you mentioned channel Rois still healthy you're taking share competitors are also experiencing challenges why why didn't I guess the aperture right now as he sat and start committing capital elsewhere, rather than maybe drilling down organically on the core if the sort of <unk>.

Speaker Change #101: This is unchanged has has the view I guess around the sort of medium term opportunity there changed in any way. Thank you.

Charles Hanson Gillespie: Hey, Clark, just to pick up the second one. Because we have such profitability and high cash flow, we can do both. Okay, we can prioritize. We are adequately investing in our assets. And we expect those to drive growth going forward, as they always have. And we have a balance sheet to pursue M&A as well.

Clarke: Hey, Clarke just to pick up the second one.

Speaker Change #101:

Yes.

Clarke: Because we have such profitability and high cash flow. We can do both okay. We can we can prioritize we are adequately investing into our own assets.

Clarke: And we expect those to drive growth going forward as they always have.

Clarke: And we have the balance sheet to pursue M&A as well.

Charles Hanson Gillespie: But yeah, there is an increased focus on revenue, which is more predictable. And if we go out and do another acquisition of a performance marketing company, we don't really address that. In terms of growth next year, you know, we, Gambling.com, are doing very, very well around the world. In the past, it was just the UK website. And then it was a UK and US website. And, you know, we keep bringing it into new jurisdictions.

Clarke: But you know there is a increased focus on revenue, which is more predictable and.

If we go out and do another acquisition or in a performance marketing company, we don't really address that.

Clarke: In terms of growth next year.

Clarke: <unk>.

Clarke: Gambling dot com is doing very very well.

Clarke: Around the world.

Clarke: In the past it was just the U K website and then it was the U K and U S website we.

Clarke: Keep bringing it into new jurisdictions.

Charles Hanson Gillespie: We just launched a Greek version of Gambling.com. I think this week, and we have a new, Greece is one of two markets in Europe where you actually need a license and an affiliate. So we have a Greek license now.

Clarke: We just launched a Greek version of gambling Dot com.

Charles Hanson Gillespie: And we're live with gambling.com, and we expect to take market share there. I mean, you know, we were starting from zero, and we're bringing in a killer asset. So things like that, you know, the free nuts.com acquisition, we see, as we had said, really quite a lot of unlocked potential. But we've got to replatform it first.

Clarke: This week and we have a new.

Clarke: Greece's one or two markets in Europe, where you actually need licenses affiliates. So we have a Greek license now.

Clarke: Live with gambling dot com and we expect to take market share there.

Clarke: Starting from zero in and we're bringing in a COO.

Clarke: Miller asset so.

Clarke: It's things like that.

Clarke: Green Dot Com acquisition, we see.

Clarke: As we have said.

Clarke: Really quite a lot of unlocked potential.

Charles Hanson Gillespie: We need six months to move it on to our tech stack and integrate fully into our deals and our processes and everything else. So you don't really see that upside until that's done, and that'll be done in Q4 and Q3.

Clarke: But we've got to re platform at first we need six months to move it onto our tech stack to.

Clarke: Integrated fully into our deals and our processes and everything else. So you don't really see that upside until that's done and that'll be done.

Charles Hanson Gillespie: So we'll start to really feel the benefits of that a little bit this year but mainly next year. You know another example here? Romania doesn't sound like a massive growth opportunity, but it's a consistent and good European regulated sport setting in the market. Romania, the other European jurisdiction that requires a license for affiliates, and we've applied, and we're, you know, apparently hours away from getting our Romanian license, and we'll go live with gambling.com and Romania as well, you know, so.

Clarke: Q4 and Q.

Clarke: Q3, Q4, so we'll start to really feel the benefits of that.

Clarke: Little bit this year, but mainly next year.

You know another example here is.

Clarke: Romania, It doesn't sound like a.

Clarke: So a massive growth opportunity, but it's a consistent and good European regulated sports betting.

Clarke: Arguing markets and.

Yeah.

Clarke: It's all the other European jurisdiction that requires a license for helix and we've applied and were you know.

Apparently hours away from from getting our Romanian license and will go live with gambling dot com and in Romania as well.

Clarke: You know so.

Yeah.

Charles Hanson Gillespie: Our assumptions at this point are not for massive U.S. market expansion in 2025. We think there'll be some new stock state launches probably towards the back half of 2025. But, as you know, we don't put new state launches in our guidance. So the growth, Bridge to get from where we are to that 2025 adjusted EBITDA figure is really organic growth from our core assets. I can, I can add a little bit.

Clarke: Our assumptions at this point are not four.

Clarke: Massive U S market expansion in 2025.

Clarke: We think there'll be some new solid state launches probably towards the back half of 2025.

Clarke: But as you know, we don't put new state launches in our guidance so that the gross.

Clarke: Bridge to get from where we are too.

Clarke: That 2025, and adjusted EBITDA figure is really organic growth from our core assets.

Elias Mark: I can add a little bit. We do see strong operating efficiencies in our open, and revenue growth is going to come from our owned and operated websites, which have 100% gross margin and when you add operating leverage from operating expenses, are not going to grow that substantially between 24 and 25. That's how you bridge that gap.

Speaker Change #103: I can I can add a little bit.

Speaker Change #103: I think if you looked at the.

Speaker Change #103: The mid point or updated 24 guidance.

Speaker Change #103: That implies quite a sort of I think 14% year over year.

Speaker Change #103: And the mid point, if I'm not wrong.

Speaker Change #103: 2025 Street consensus it's 54, so that would represent a 26% growth from from.

Speaker Change #103: From 'twenty four to 'twenty five.

Speaker Change #103: Not all of that growth is going to be reflected in gross revenue.

Speaker Change #103: Alluded to it and be cool.

Speaker Change #103: We do see a strong operating efficiency.

Speaker Change #103: That's and that that revenue growth is going to come from our owned and operated.

Speaker Change #103: Websites, which will have a 100% gross margin and when you add all creating leverage from operating.

Speaker Change #103: Operating expenses.

Speaker Change #103: Not gonna grow not substantially between 'twenty four 'twenty five.

Can you break that out.

Speaker Change #104: Thank you.

Charles Hanson Gillespie: There are no further questions at this time. I would now like to turn the floor back over to Charles Gillespie for closing comments.

Speaker Change #104: There are no further questions at this time I would now like to turn the floor back over to Charles.

Charles Hanson Gillespie: Closing comments.

Charles Hanson Gillespie: Thank you everybody for joining us again today. We are off to a great start this year and I'm sure that 2024 and beyond are going to be another year of fantastic growth for the group. Thanks for your interest; will catch you for the Q2 results. Bye-bye. This concludes today's teleconference.

Charles Hanson Gillespie: Thanks, everybody for joining us again today.

Charles Hanson Gillespie: We are off to a great start this year and I'm sure. The 'twenty 'twenty four and beyond are going to be.

Charles Hanson Gillespie: Another year of fantastic growth for the group Ah Thanks for your interest in.

Speaker Change #105: Catch you.

Speaker Change #105: Q2 results Bye bye.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #106: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #106: [music].

Operator: Grp Grp Grp Grp Grp Grp Grp Grp Grp Grp Grp Grp Grp Grp Grp [inaudible] ?? ?? ?? ?? ?? ??

Speaker Change #106: Okay.

Speaker Change #106: [music].