The independent provider of sports betting technology and services to regulated markets world-wide Kambi Group issued yesterday a trading update ahead of its fourth quarter earnings report which will be released on February, 10, 2021.

Q4 2020 Revenue Updated Upwards

The operator noted that during the quarter a combination of favorable factors such as a particularly strong trading margin and continued momentum in turnover boosted revenue which is now expected to be in the range of €46 million to €48 million, an increase of between 72% and 79% compared to the €26.7 million posted in Q4 in 2019.

Kambi outlined it experienced a run of favorable sporting results in multiple sports and across its key markets which contributed to an operator trading margin of 9.4%, 2% higher compared to the 7.4% margin the company had in the fourth quarter of 2019, and above the expected average long-term trading margin of 7% to 8%.

Share Options Programs Weigh on Costs

Kambi expects for the fourth quarter to have operating expenditure in the range of €24 million to €25 million, higher than its previous guidance due to the higher cost from share options programs which are directly driven by market share price movements.

Compared to the €20.5 million operating costs in Q4 2019, fourth quarter operating expenditure is expected to be between 17% and 22% higher. Regarding the first quarter in 2021, Kambi expects its operating expenditure to vary between €23.5 million and €24.5 million.

The aggregate effect of the increases in revenue and operating costs would lead to earnings before interest and tax (EBIT) for the fourth quarter in the range of €21 million to €24 million, more than three times higher than the €6.2 million generated in Q4 2019.

Regarding its full-year financial results, the Stockholm-traded group now expects to have EBIT in the range of €31 million to €34 million, a significant upgrade to the €14.7 million the company posted for the same period in 2019.

2021 would also see Kambi completely terminate its partnership with Boston-based daily fantasy and sportsbook operator DraftKings. Last year, following on the acquisition of SBTech by the betting company, both parties agreed to cooperate for DraftKings’ migration from Kambi’s back-end platform services to the sports betting and iGaming platform of the newly acquired technology provider, setting September 30, 2021 as the final termination date.