Gambling.com Group Limited (NASDAQ:GAMB) Q3 2023 Earnings Call Transcript

Charles Gillespie: Hey, Chad. The media partnerships will vary according to the seasons. When — at the beginning of NFL, the engines firing on all cylinders, we’re going to do well, they’re going to do very well, deeper into the kind of slow months of the summer, we won’t be – number one in the industry will be doing as well and they will be doing less well as well. So in terms of proportion, the proportion coming from media partnerships will peak in kind of — because of the U.S. Sports calendar, it kind of — Q3, Q4, Q1 and the bottom will most likely be in Q2. But as I described it at the beginning of the prepared remarks, this is kind of the coming out party for these media partnerships. This is the first NFL launch we’ve had with Gannett.

They have some of the most authoritative and powerful assets in the U.S. digital media landscape. So we obviously made our estimates for all of this and as we do we’re somewhat conservative and it has come together better than we expected. So clearly this model has got a ways to go and I think it’ll be some time before we’re exploring the limits of what’s possible with these media partnerships. It’s still pretty early with this stuff.

Chad Beynon: Okay. Thanks, Charles. And then segue in terms of exploring. As you think about Latin American opportunities, I know there’s a handful of markets that have come up and kind of expectations have been reduced, but still should be a very large market over the next five, 10, 15 years. Anything interesting down there? Anything kind of worth talking about? Is that a market that could be a meaningful contributor, or is the focus still just kind of North America for the next five to 10 years? Thanks.

Charles Gillespie: The focus at the moment is certainly North America and a handful of European markets, over the next five to 10 years anything’s possible. We’re not anti-Latin America at all. We think it’ll be a phenomenal growth driver of this business in time. But we also think that there’s no meaningful first mover advantage. We think about the UK market and how we entered the UK in 2009, 2010 with 0% market share. And we think about the business we have today, which is probably the leading business in certain respects. Latin America would be much more similar to the UK than it would be to the U.S. When you think about these kind of gray markets going fully regulated, it’s all the same operators. In many cases, the player accounts carry over, and there isn’t this kind of big bang effect when the state launches.

Whereas in the U.S., when you have a new state, it’s all new operators, all new player accounts. It’s gone from totally black to totally white, and you have this kind of big bang moment and that’s a key part of our U.S. strategy. There is a first mover advantage for these U.S. states. That’s a U.S. specific phenomenon and as a result we are taking a little bit of a wait and see approach on Latin America. To the extent that that gets serious and we see some big numbers coming out of Latin America, we can easily move our premier assets like Gammie.com and Casinos.com into those markets. But today, we’ve got an incredible amount of opportunity just here in the United States and still in Europe. So there’s no strategic push at this moment into Latin America.

Chad Beynon: Great. Thank you very much guys. Nice quarter.

Operator: Our next question comes from the line of Ryan Sigdahl with Craig-Hallam Capital Group. Please proceed with your question. Your line is now live.

Ryan Sigdahl: Hey. Good afternoon, Charles, Elias. I want to start with the SDM (ph) bet. I know it just launched yesterday, but it is prominently displayed on your site, which seems safe to say, I guess, that they are a paying customer, but can you confirm that? And then aggressive U.S. spend from them should be nice positive for you guys, correct?

Charles Gillespie: Thanks, Ryan. I was worried we were going to get through this whole call without anyone asking anything about ESPN, but yes they are live launched yesterday they are working with affiliates but they’re only working with a handful of affiliates we are one of them. I got some numbers this morning on the performance yesterday and it was extremely strong. It was a very impressive day one. Now it’s just one day so we’re not reading too much into that but we are very pleased with the first 24 hours.

Ryan Sigdahl: Great. Then just on guidance, FX, the assumption you guys are using modestly worsened, I guess, with the U.S. be strengthened, which is bad for U.S. reporting, but that combined with a little more rev share in the U.S., I guess it implies the underlying fundamentals of the business or outperforming to offset those impacts or I guess should we assume the shifts towards the lower end of the guidance range?