Gambling.com Group Limited Ordinary Shares 2026 Q2 Earnings Call

Please go ahead, sir. Hello, everyone, and welcome to Grandstand's second quarter 2026 results call.

I am Peter McGough, Senior VP of Investor Relations and Capital Markets, and I am joined by Kevin McCrystle, 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 grandstand.com/investors. A downloadable version of this press release 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@grandstand.com. 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 results, 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 Grandstand's filings with the Securities and Exchange Commission. 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. 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 this afternoon, and reconciliations of these non-IFRS financial measures to their most directly comparable IFRS measures are also in the press release, which is available in the Investors tab of our website. I will now turn the call over to Kevin.

Good afternoon, everyone, and thank you for joining our 2026 second quarter conference call. We have quite a bit to share with you today, including our second quarter results and outlook for the full year, as well as our recent corporate rebranding and the introduction earlier this week of our new Rollcard product. Elias Mark will follow with a review of the second quarter financial results in detail before we open it up for questions. Looking at our operating performance in the second quarter, revenue of $37.8 million and adjusted EBITDA of $7.7 million were in line with our expectations. We also generated nearly $10 million in adjusted free cash flow, which is a positive indication on the health of our business and our ability to generate attractive levels of cash flow.

The restructuring we announced in May is now substantially complete, with the bulk of the associated costs incurred in the second quarter. Cost savings from the restructure will benefit margins in the second half of the year, underpinning our full-year guidance, which we reiterated today. Looking a little further out, we will exit 2026 with a significantly higher adjusted EBITDA and free cash flow run rate and an expanded margin profile for the business. The second half margin profile will carry forward into 2027. Our business has grown and diversified significantly since our IPO, and our recent rebrand reflects these changes. Grandstand captures where the business is today, and importantly, where we will continue to invest and grow. We have established our position as the intelligence layer at the heart of the sports and gaming ecosystem.

Our portfolio of data, technology, content, and audience solutions help power informed decisions across sports, gaming, and entertainment, serving both consumers and partners. Our consumer brands have built trust with each of their unique audiences developed over more than 20 years and will continue to reach millions of users under the Grandstand umbrella. We started as a U.K. gaming comparison hub and over time added products targeting new global audiences around sports betting, fantasy sports, and Las Vegas. Now, in addition to recommending the best places for users to play online, we're developing more of our own products to directly service the problems users face in the market, thus deepening the relationship with each user. The data, technology, and advertising tools we developed initially for consumer audiences have significant application for partners in the wider sports, gaming, and entertainment ecosystem. Today, we have multiple partner solutions across five core areas.

Sports data, which includes real-time odds data, line movement, injuries, and sports content, namely via OpticOdds. Advertising with our ad tech and commercial solutions, connecting operators to consumers. Partner audience monetization through Grandstand Partners, a technology and commercial support platform that provides media companies, apps, communities, and influencers with the infrastructure to monetize their audiences at scale. Entertainment and ticketing solutions through Spotlight.Vegas. And now FinTech, with the recent launch of Rollcard, which I will come back to soon. Clearly laying out our partner solutions helps us discover more B2B opportunities. We will continue to report based on sports data services and marketing. Sports data services revenue grew 12% year-over-year in Q2, with B2B continuing to be the accelerating growth driver. Sports data revenue is on track for growth in the teens this year, with significantly higher growth coming from our B2B OpticOdds solution.

B2B now makes up the majority of revenue for the sports data services business and is pacing to grow well in excess of 50% this year compared to last year. OpticOdds is the intelligence layer, powering informed decisions in sports, processing more than 1 million requests per second. New B2B data deals in Q2 were led by quant and market-making partners who value the speed of our data. 40% of our new deals were to international partners, and we continue to see success upselling existing clients. OpticOdds is also rapidly becoming the sports data layer for consumer AI. Perplexity went fully live into production in early July. OpticOdds is the 11th most invoked connector in Perplexity, ahead of massive enterprises like Gmail, Google Drive, Slack, Notion, and Snowflake. API daily volume requests are still climbing by the day, all before the natural catalyst of the NFL season.

Q2 total marketing revenue is down 10% year-over-year to $26.5 million, driven from declines in SEO revenue. We saw strong growth in North America and from our partner audience monetization platform, Grandstand Partners. Our marketing business has dramatically diversified from a year ago, with non-SEO marketing revenue now accounting for 67% of our marketing business. While gross margins for our non-SEO channels are lower, the OpEx requirements tied to these revenues are also much lower than for organic SEO. The restructure heavily targeted fixed costs in the marketing business, which will result in improved margins going forward. As we move into the second half of the year, we see a clear path to returning the marketing business to growth for the 2027 full year.

I also want to highlight that even at the lower marketing revenue run rates, our marketing operations continue to generate attractive levels of cash flow. Now we can finally talk about Rollcard, our new fintech solution. It's a purpose-built, FDIC-insured, high-limit debit card for sports betting, casino, and prediction markets. Payments and money movement remain a high friction point in gaming for both consumers and operators. Rollcard has been designed as a high-limit, low-friction debit card built with a betting consumer in mind. The revenue model is based on interchange generated from dollars deposited into sportsbooks, casinos, and prediction markets. Rollcard customers earn cash back on qualifying deposits. The underlying deposits that drive handle and trading volume are in the tens of billions of dollars.

A low single-digit market share for gaming, betting, and trading deposits forecast a $50 million-$100 million revenue opportunity in the next five years. The majority of handle and trading is concentrated into a smaller cohort of players that actively bet across multiple platforms. Rollcard was designed to serve that cohort of players. The value proposition for the cardholder is simple, safe, private, high-limit, low-friction debit card to manage the funding of their betting and trading strategies. The cardholders will be incentivized with cashback program and other premium benefits that we'll introduce to enhance cardholder experience and loyalty. Rollcard is backed by Grandstand sports, gaming, and entertainment audience. That existing audience relationship provides Rollcard direct reach to high-intent customers from the start. In addition, our existing relationships with prediction markets, online operators, and land-based operators will expedite the go-to-market motion.

The Rollcard payments platform is a clear example of Grandstand developing value-added solutions as a fintech intelligence layer for payments in sports, gaming, and entertainment, creating a deeper connection between both consumers and partners. Looking forward, the balance of 2026 is setting up for a typical seasonal pickup as we move into the North American sports season, which will drive revenue growth. We will also benefit in the second half of this year from the restructure related fixed cost savings, which will drive margin improvement. Restructure wasn't just about resetting our cost structure. It was an intentional shift to layer AI at the core of how we operate, then build teams around it. The AI-enabled restructure has allowed us to reduce management layers and empower more nimble teams. Repetitive processes have been, and continue to be automated, while work velocity is increasing.