Kambi Group plc’s Board of Directors has withdrawn its previously announced 2027 financial targets, citing slower-than-expected regulatory progress in key markets as a primary reason. The decision follows a comprehensive review initiated in February, which reassessed the company’s progress in its core jurisdictions, challenging the assumptions that shaped its January 2023 financial targets.
This Downturn Should Not Affect Long-Term Growth
Kambi’s original targets aimed for significant growth, projecting revenue of 2-3 times its FY2022 levels, amounting to approximately €330 – €500 million ($357 – $541 million), and an EBIT exceeding €150 million ($162 million). These ambitious goals reflected Kambi’s confidence in its strategic direction and the anticipated expansion of regulated markets. However, some of the company’s assumptions failed to materialize.
The review highlighted that while Kambi has made commendable progress in areas within its direct control, the anticipated pace of regulatory advancements in some of its core markets has been slower than expected. The company expects this regulatory lag will likely delay the revenue streams from these markets, thereby impacting its ability to meet its 2027 financial projections.
This financial announcement coincides with significant leadership changes within the company. Earlier this week, Kambi appointed Werner Becher as the new CEO. The Board has expressed its commitment to supporting Becher as he spearheads the execution of Kambi’s long-term strategy, aiming to consolidate and extend its position as the world’s leading sports betting provider.
Kambi Remains Optimistic Regarding Its Prospects
Becher’s leadership will prioritize establishing new targets, ensuring they align with the company’s evolving strategic vision and market conditions. In its unaudited Q1 2024 report, Kambi posted €43.2 million ($46.2 million) in revenue, reflecting a slight 2% decrease year-over-year compared to the Q1 2023 figure of €44.0 million ($47 million).
Despite challenges in some jurisdictions, the company remains a preferred sportsbook partner, particularly among tribal entities in the US. In April, Kambi strengthened its market position by forming a multi-state sportsbook partnership with the Choctaw Nation of Oklahoma, one of the largest Indian communities in the US, underscoring the company’s ongoing commitment to expanding its footprint in regulated markets.
The Board believes that Kambi should have in place long-term financial targets. Such targets will be evaluated with the new CEO and communicated when appropriate.
Kambi official announcement
While reevaluating its 2027 financial targets represents a strategic pivot, Kambi remains focused on leveraging its strengths and adapting to market dynamics. The company retains significant resilience and potential for growth, even amidst regulatory uncertainties. As Kambi navigates this transition period, stakeholders can expect updates on new financial targets and strategic initiatives to drive sustainable growth.