GCI - Gambling.com CEO talks strong sports betting trends in 2023

2023-05-22 11:26:58 ET

Gambling.com Group ( NASDAQ: GAMB ) CEO and founder Charles Gillespie outlined aims to continue momentum in 2023 in an interview with Seeking Alpha.

The executive spoke to Seeking Alpha shortly after the company he helms posted strong Q1 results and hiked full-year guidance. The company notched a 36% rise in revenue year over year to $26.69M in Q1 as adjusted EBITDA rose 49% to $10.67M. Over 88,000 new depositing customers were added in the quarter as well, marking an over 30% jump from Q1 2022.

Based upon the better than expected Q1 print, management raised the bar for the full year, anticipating revenue of $95M to $99M and adjusted EBITDA of about $33M to $37M.

Gillespie noted that the launch of betting and Massachusetts and Ohio have already begun to bolster results and said he expects growth to continue at pace as more markets open up. Indeed, he pointed to mature markets in Ireland and the UK where the company excels as a sign that the company has significant room to grow as sports betting and gambling more broadly becomes normalized and regulated across more jurisdictions.

“The best users for us are power users, who know their way around and want something specific and need help finding it,” he told Seeking Alpha. “At the beginning of the industry, someone might open a DraftKings account and try it out. But soon consumers discover there are other options and start to explore beyond the most obvious options. That is really when our business can outperform.”

Recession Resistant?

Gillespie also indicated the company should continue to grow amid a potential recession.

“It’s definitely true that the gambling industry is traditionally resistant to challenging economic conditions. But, when you look at the online gambling industry, it is growing so fast that the sort of headwind a recession presents is really immaterial to the overall growth rate of the overall industry,” he said. “Even in 2008, you felt the impact somewhat, but it hasn’t made that much of a difference. At the end of the day, it’s a high growth industry and at this stage it isn’t having that much of an impact.”

He noted that even mature markets, such as the UK & Ireland, are growing at impressive clips. For example, growth in the UK and Ireland notched record quarterly record revenue in Q1, with revenue rising 36% to $8.5M, making up a sizable chunk of overall top-line result.

The results were particularly encouraging given competition on the European continent such as Better Collective in Sweden, which have been acquisitive to assert their respective positions. Gillespie said that the lack of acquisitions pursued by Gambling.com ( GAMB ) and its current position speaks to a technological edge he expects to sustain growth.

Sports and Seasonality

That said, the summer season is expected to slow somewhat. Gillespie highlighted the fact that most online activity slows in the summer as consumers seek activities outside and generally take time off.

Further, there is simply a lack of sports to bet on once the playoffs for American sports wrap up and baseball takes center stage as essentially the only major league to remain running into July and August. For Gambling.com, some iGaming activity smooths this out to a degree, but the start of the NFL season is the real time for a bounce-back, Gillespie said.

“We have a seasonal pattern that reflects the sports calendar and the autumn sports season, when NFL kicks off, is the prime time and that runs until about May when both the major US sports leagues and soccer in Europe wraps up,” he explained. “So usually Q1 is the best quarter of the year, followed by Q4, and Q2 and 3 are typically the quietest. Although Q3 can end up being one of your better quarters, it all depends on September and even the number of NFL Sundays that fall in September.”

Moving into the latter half of 2023, he foresees partnerships with major media players like Gannett ( GCI ) and McClatchy should bolster the company’s profile into the all-important NFL season.

Shares of Gambling.com ( GAMB ) have marked a modest gain since its Q1 report on Thursday, bringing the year to date gain to about 10% . The stock has rocketed about 25% higher in the past year.

More on Gambling.com:

Gannett and Gambling.com team up digital media network

Gambling.com gains after posting strong Q1 growth

Sell-side ratings on the stock

Seeking Alpha Quant rating for Gambling.com

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