By Chris Wack
Gambling.com Group shares were down 19% to $11.07 after the company said in its earnings call for third quarter that its cost of sales went up and revenue in Europe declined 17%.
The company’s finance chief, Martin Elias Mark, said cost of sales during the quarter were $2.1 million, compared with $600,000 in the same quarter last year.
Total operating expenses in the quarter were up 9% to $16.6 million, an increase that was primarily driven by a higher headcount, despite a moderated pace of hiring.
The company also said that after seven quarters of growth in the U.K. and Ireland, it entered a more challenging year-over-year comparison this quarter. U.K. and Ireland revenue was steady at $6.9 million, but revenue from other European nations declined by 17%, or $465,000, because of compliance-driven product changes implemented for the German market.
Adjusted Ebitda margins were 26% higher, reflecting a higher revenue contribution from the company’s media partnerships, driving cost of sales higher compared with its own sites.
Gambling.com had a cash balance of $26.9 million, down $4.1 million from last quarter, primarily reflecting a $5.4 million payment for the purchase of BonusFinder.
Earnings for the quarter were $5 million, or 13 cents a share, compared with $2.3 million, or 6 cents a share, in the same quarter last year. Analysts polled by FactSet were looking for earnings of $4.4 million, or 12 cents a share.
The company said revenue was $23.5 million in the third quarter, up 19% from last year’s $19.6 million and above the $22.2 million analysts had forecast.
For fiscal 2023, the company is expecting revenue of $100 million to $104 million, compared with the $103.4 million analysts are expecting.
Write to Chris Wack at [email protected]