Gambling.com Group Q1 2026 Earnings Call - SEO Decline Offset by Data Growth and AI-Driven Restructuring

Operator: Good afternoon, ladies and gentlemen, welcome to Gambling.com Group’s first quarter 2026 earnings conference call. During the call, your lines will remain in a listen-only mode. After the speaker’s remarks, there will be a question-and-answer session. I would like to advise all parties that this conference call is being recorded. Now I will turn things over to Peter McGough, Senior VP of Investor Relations and Capital Markets. Thank you. You may proceed, Peter.

Peter McGough, Senior VP of Investor Relations and Capital Markets, Gambling.com Group: Good afternoon. Hello, everyone, and welcome to Gambling.com Group’s first quarter 2026 results call. I’m Peter McGough, Senior VP of Investor Relations and Capital Markets, and I am joined by Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Charles Gillespie, Gambling.com Group’s Co-founder and current Chief Executive Officer, and Elias Mark, Chief Financial Officer. This call is being webcast live through the investor relations section of our website at gdcgroup.com/investors, and a downloadable version of the presentation 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 [email protected]. 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 Gambling.com Group’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as to 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 earlier this morning, and reconciliations of this non-IFRS financial measures to their most directly comparable IFRS measures are included in the appendix to the presentation and press release, both of which are available in the Investors tab of our website. I’ll now turn the call over to Kevin.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Good afternoon, everyone, thank you for joining our 2026 first quarter conference call. Given that I will be formally taking over as CEO next week, I will also lead the call today. Elias will follow with a review of the first quarter results, then Charles will offer some closing comments before we open it up for questions. First quarter revenue was EUR 40.4 million, in line with last year, while adjusted EBITDA was EUR 9 million. Our sports data services business grew 13% year-over-year to EUR 11.2 million, accounted for 28% of total revenue, the highest percentage yet. This growth was offset by a 5% revenue decline in our marketing business, which continues to be impacted by the previously discussed challenges with search ranking, as well as more recent regulatory headwinds we highlighted on our Q4 call.

Elias will provide more details on our first quarter financial results, but I do wanna highlight that we generated attractive adjusted free cash flow in Q1 and expect revenue, adjusted EBITDA, and free cash flow to expand in the second half of the year. As I noted, sports data services revenue was up 13% year-over-year. The year-on-year growth primarily reflects continued improvement on the enterprise side of the business, catching up to the consumer side. For the first time, revenue contribution roughly equal for both offerings. Our OpticOdds business continued to be the catalyst of our strong sports data services performance. OpticOdds growth in Q1 was driven by 94% new deal growth compared to Q1 2025, including international partners up 178% year-over-year. Total active partners were up 24% quarter-on-quarter.

86% of OpticOdds customers are now API customers rather than just traditional odd screen partners, which was the initial focus of the business. A key driver of our ability to have the most innovative sports data enterprise solutions is our increasing integration with customer AI touchpoints. As an example, OpticOdds now has an MCP integration into Claude, allowing our enterprise customers to use Optics data where they are already spending their workday. By integrating with the number 1 enterprise AI tool in the world, our already incredibly sticky enterprise odds product is even stickier. More recently, OpticOdds entered into a partnership with Perplexity to be the odds data’s provider across their product suite with an expected launch date before the end of Q2.

Turning now to our marketing business, revenue of EUR 29.2 million in Q1 reflects the negative SEO trends we have been discussing for several quarters. There’s been some bifurcation between smaller niche sites and larger brands within SEO, as some of our larger brands, such as RotoWire, are showing more positive rankings. We are continuing to focus on a more concentrated portfolio of brands and diversifying revenue streams, marketing channels, and CRM re-engagement on these larger brands. There are two other impacts in the marketing business to call out. First, the change in U.K. and Finland regulation we highlighted on the Q4 call had a modestly worse than expected impact on performance in Q1, and revenue from revenue share agreements was impacted by unfavorable outcomes in the quarter, causing a decline in the rev share hold % versus deposit.

We continue to make steady progress diversifying our marketing revenue away from SEO. In Q1, our non-SEO revenue exceeded SEO revenue for the second consecutive quarter, and we expect that trend to continue. There’s a near-term margin impact as these channels scale. We do expect margins to begin gradually expanding in the second half of 2026 and into 2027. We have spent years building internal platforms to optimize engagement and monetization across our portfolio. This audience monetization platform bundles our ad tech, data tech, business intelligence, data. Over the past years, we have begun leveraging these tools and technology to help us more effectively monetize third-party audience by allowing external partners to access our wide range of technology, commercial relationships, and know-how.

In the rapidly evolving digital ecosystem, we are diversifying how we market our owned and operated brands, but also developing a platform to engage and monetize users across a wide variety of partner assets and communities. Previous iterations of what we then called media partnerships had a narrower focus on FCO. Partnership platform revenue was up 3x year-over-year for Q1. As part of our channel diversification in-initiative, this does have an impact on our cost of sales, but we can scale this platform with low OpEx requirements. As we continue the R&D efforts to expand our technology capabilities on our internal portfolio, it will open up new types of partners where we can leverage our technology to grow their business as we both share in the revenue. We’ve been focused on AI adoption for the past 18 months.

The work so far has proven the effectiveness of AI-first agentic workflows. Now we’re taking the next step, moving from AI assisting our teams to making AI the foundational layer of how the entire organization operates. That shift is significant, and it’s driving real change in how we work. AI tools allow us to move faster, adapt more quickly, and deliver more product, marketing and sales innovation, all while doing so with smaller, nimbler teams focused on building. This way of working puts a premium on human agency, with our people bringing their expertise and craft to direct what AI produces. We have already made significant progress, with 80% of new code being generated by AI today. Alongside this, we are resetting our team structures, roles, and processes to fit an AI-first world. That means embracing context layers, skills, and agents across the company.

The result is a flatter organization, newer management layers, and everyone from senior leadership down focused on building automations, products, and go-to-market campaigns that compress timelines and drive efficient growth. We are confident this transition to AI-first ways of working will allow us to move faster and with fewer people. Highlighted in this afternoon’s press release, we have proposed a strategic restructuring, which is expected to affect a reduction of approximately 25% of our workforce. The annualized savings will be approximately EUR 13 million. Given the timing of this streamlining of the organization, we expect about half of this amount will be realized this year, beginning in Q3, with the full amount realized in 2027. The EUR 13 million of annualized savings is net of an increase in AI usage costs associated with our transition to an AI-first company.

This restructure resets our organization to work more effectively in an AI-first environment. For that, I’ll turn the call over to Elias for a review of our Q1 financial results and detail our guidance for the year.

Elias Mark, Chief Financial Officer, Gambling.com Group: Thank you, Kevin. First quarter revenue of EUR 40.4 million was flat year-over-year and in line with expectation, with continued strong growth in data services of 13%, offsetting a 5% decline in marketing spend. Data revenue was 28% of total revenue in the quarter, the highest proportion yet. Total recurring revenue, including subscription revenue and revenue share arrangement, was 49% of total revenue. A 13% year-over-year growth in data services was driven by growth in enterprise services that, for the first time, was roughly of equal size to consumer data services. The 5% year-over-year decline in marketing revenue was driven by a continued impact from low-quality search results and the regulatory headwinds in the U.K. and Finland that were discussed on the fourth quarter call.

The proportion of revenue from traffic source other than organic search was well over 50% and a bit higher than forecasted in the quarter, leading to increased resiliency but lower contribution margins for from market. As we continue to execute on the traffic diversification strategy for the marketing business, cost of sales grew year-over-year from EUR 2.2 million to EUR 6.1 million. As a result, gross profit declined 11% to EUR 34.4 million. Gross profit margin was 85%, consistent with the fourth quarter and comparing to 94% in the year ago period. Operating expenses exclusive of non-cash amortization of acquired intangible assets, transaction bonuses, and other non-recurring costs grew 12% year-over-year to EUR 28.2 million, primarily driven by higher external marketing expenses related to traffic diversification strategies and higher subscription costs from increased AI usage.

Total headcount at the end of the period was down approximately 5% year-over-year before the restructure takes effect. Adjusted EBITDA in the first quarter was EUR 9 million, and the adjusted EBITDA margin was 22%, compared to EUR 15.9 million and 39% in the year ago period. The lower margin reflects the higher cost of sales and external marketing expenses associated with our traffic diversification strategy. Adjusted net income of EUR 3.8 million and adjusted net income per share of EUR 0.09 compared to EUR 16.5 million and EUR 0.46 in the year ago period. The decline reflects the lower adjusted EBITDA and higher interest expense and tax charges.

It is worth noting that the year ago period included finance income of EUR 3.9 million related to foreign exchange movements distorting comparability. Adjusted free cash flow went to EUR 3.9 million compared to EUR 10.3 million in the year ago period, reflecting the lower adjusted EBITDA and slightly higher capital expenditures related to product development. During the quarter, we settled EUR 6.2 million of the deferred consideration and transaction bonuses related to the OddsJam acquisition and will repay EUR 2.8 million on our term loan. As of March 31st, we have total cash of EUR 8.4 million, total liquidity inclusive of the undrawn revolver of EUR 40.9 million, we have EUR 121 million outstanding on our credit facilities. As Kevin covered, we’ve initiated a group-wide restructure to support our move to AI-first working principles and a flatter organization.

Restructure is expected to reduce headcount by 25%, driving approximately EUR 13 million of annualized cost savings. Given the timing of the restructure, we expect to realize around half of the EUR 13 million in cost savings in the second half of 2026. This would drive margin expansion and significantly grow adjusted EBITDA and free cash flow generation sequentially second half of 2026 and beyond. Our consistently strong free cash flow generation enables us the flexibility to both delever and continue to invest in organic growth. Let me turn now to guidance. This afternoon, we updated our full year 2026 guidance for revenue to be in the range of EUR 165 million-EUR 170 million and adjusted EBITDA to be in the range of EUR 45 million-EUR 50 million.

The implied margin reflects the effect of mix shift in marketing revenue, partially offset by cost savings from the restructuring in the second half of the year. We expect margin expansion and significant sequential growth in revenue and adjusted EBITDA in the second half of the year. With that, I’ll hand it over to Charles for his closing remarks.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: Thanks, Elias. Given this is my last earnings call, I wanna take the opportunity to say thank you to everyone who has supported me over the past 20 years. It takes a village to build an enterprise like Gambling.com Group, and I am grateful to everyone in all corners of the world who has pitched in over the past 2 decades to help realize the vision Kevin and I shared for this business. Many sincere thanks to each and every one of you. Going forward, I intend to remain active as executive chairman in the business, handling key strategic conversations and supporting Kevin as best I can. I remain the company’s second-largest shareholder, and I have no intention of changing that.

I am thoroughly excited about the company’s products pipeline, which includes additions to winning products like OpticOdds, growth opportunities for the marketing business, as well as new innovative products which are in development. I have no doubt whatsoever that Kevin is best placed to lead the organization into its next chapter, commanding our product direction, talented team, and increasingly broad AI initiatives. I’ve always been keen to zoom out and paint a big picture, especially on earnings calls, which are by definition very short. I will leave everyone with one more big picture perspective on where the company is going. I’ve been a student of the AI revolution from the beginning. I read Ray Kurzweil’s The Singularity Is Near in 2008, and no book before or since has shaped my understanding of the future as profoundly as that one.

Nearly 18 years ago, his predictions for exponential technological advancement are bang on schedule and accelerating exactly as he said they would. With that backdrop in mind, Kevin and I have been making deliberate moves to ensure the AI revolution is a tailwind for GAMB, not a headwind. We diversified the marketing business away from sole reliance on SEO. We acquired a data business with arguably the most comprehensive odds database in the world, and we made a bet on live experiences with spotlight.vegas. These were not unrelated decisions. They were part of a high conviction strategy, which includes our product pipeline that will ideally position GAMB for enduring success in the age of AI. Thank you again. Operator, we’re ready to take questions.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. If I may just ask, please limit your questions to one question and one follow-up question. For participants using the speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment please while we hold for questions. The first question comes from Ryan Sigdahl from Craig-Hallum Capital Group. Please proceed with your questions, Ryan.

Ryan Sigdahl, Analyst, Craig-Hallum Capital Group: Hey, good afternoon, and congrats, Charles and Kevin, on your new roles. Wanna start with a regional question, or I guess both of them are probably gonna be regional, but the U.K., U.K.&I revenue is down 30%, which directionally isn’t all that surprising. The magnitude is, I guess, can you discuss what you’re seeing from behavior in the market from players as well as what you’re hearing from ultimately your customers there during Q1, and then if anything has changed after the tax went effective in April?

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Hey, Ryan. Yeah, look, trends are really the same that we talked about in, you know, the Q4 announcement. LTVs are going down in the U.K. You know, a little bit of that was due to SEO, not just regulation. There’s still a high demand for traffic. There’s no shortage of operators looking for deals. It’s still a robust marketplace. Yeah, LTVs are moving down a bit, and traffic has been a little lower as well.

Ryan Sigdahl, Analyst, Craig-Hallum Capital Group: Anything notable change in the last post quarter, April, May?

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Well, what’s notable for us is since the beginning of Q2 or mid-April, we’ve seen, you know, started to see some increase in green shoots on SEO traffic for Gambling.com specifically. Which, you know, with how unpredictable Google’s been, we don’t wanna put into guidance right now, but we see as, you know, the first kind of positive shift in Google, since the middle of last year. That, you know, does have an impact on the U.K., or would if it persists. Yeah, the overall market itself in the U.K. is, you know, is generally what we expected. It was marginally worse in a couple areas, but roughly the shape that we expected.

Ryan Sigdahl, Analyst, Craig-Hallum Capital Group: On the U.S., if I look at some of the KPIs from the breakouts, in the press release, between marketing and data and then North America versus other markets. I’m pretty sure, marketing in the U.S. or in North America, I should say, was nicely up in Q1, but curious if you’re willing to comment on specifically marketing business in the U.S., and then the dynamics going on there. I know we’ve heard from several operators arguing that CPAs have increased in Q1, but just curious, any comments specific to the U.S. marketing business?

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Yeah, we have seen an increase. You know, we obviously report on North America, which includes U.S. and Canada. We’ve seen an increase in Q1 in marketing. Our growth there is not just sports data. We, you know, I mentioned RotoWire in the notes there earlier, in the comments earlier, that has seen some positive movement. This audience monetization platform is active in the U.S. market and Canada as well, and is growing. You know, that’s up. Yeah, NDCs are up, I think, about 60% from Q4 on that helps as well.

We’re able to leverage or kind of scale in the marketplace, in pricing power, you know, plus all the tools we have to support a lot of these competitors that maybe have a, you know, small number of really high value customers in our audience. We can help them monetize that audience with our platform. A couple different things in the U.S., but it is, you know, a positive story for us.

Ryan Sigdahl, Analyst, Craig-Hallum Capital Group: Great. Good luck, guys. Thank you.

Operator: Thank you. The next question comes from Jeffrey Stantial from Stifel. Please proceed with your questions, Jeff.

Jeffrey Stantial, Analyst, Stifel: Hey, good afternoon, guys. Thanks for taking our questions. Hey, starting off on the restructuring initiative. You know, outside of this space specifically, there’s been a bit of a debate, in terms of, you know, how much human involvement is truly needed to manage the structure and the quality of the code that’s being written with assistance from AI and that sort of risk of going too lean. I guess, you know, Kevin, how did you know, how did you think about sort of the risk from pushing too hard and too fast and risking, potentially compromising content quality or speed, when you structured this go-forward strategy? As a housekeeping, apologies if I missed it, but Elias, can you just quantify for us the one-time implementation cost?

Elias Mark, Chief Financial Officer, Gambling.com Group: You wanna take the implementation first?

I can start with that first question. We didn’t quantify that, but we anticipate the restructuring expense to be in the region of EUR 2.5 million spread out.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Yeah. In terms of how we think about transitioning to AI first, you know, it’s not like we cut our development team by half. There was, you know, some there as well. It was really across the entire business. You know, the software development gets a lot of the focus. When we think about product development, what we see now is everybody’s able to ship and build without necessarily, you know, having to run through the traditional processes of the design and build process. We’re able to kind of get product out there a lot faster with these new systems. It’s all parts of the business.

You know, we have a lot of folks across the group that work, say, on NDC business that, you know, we still need writers and editors and humans creating content. The production of that content can be a lot faster. There’s all sorts of pieces of that process that we’re able to automate so that the humans involved are, you know, have a lot of leverage and are able to kind of move faster, hopefully be more effective as well. You know, quality is key. You know, we’re really focused on this. You have craft. You know, just because you can get an easy output from AI doesn’t mean that’s good enough. You still need to really review the quality and make sure that’s there. You need to also, you know, review the direction in the first place, right?

If you could build anything or if you can build everything, like, what are we gonna build? What does, what does great look like? There’s a strong focus on that right now. There’s a lot of tools which just allow things to happen faster, whether it’s context layers, skills, agents, all those things combined. You know, we can enable people to just generally be more productive. Jeff, I’d just add that, you know, I think there’s more risk in not moving fast enough than moving too slow. You know, we wanna be at the forefront on this, and that means we need to be leaning in and very proactive. Yeah, this has been a shift for us for some time, and, you know, not all parts of the group have caught up at equal pace.

Where we are kind of ahead or we have been ahead with AI adoption, the productivity is really noticeable. I’m not as worried about, you know, the slow You mentioned speed. If anything, this should only help speed.

Jeffrey Stantial, Analyst, Stifel: That’s great. Thanks for all that color. Maybe just switching gears over to guidance. You know, you hit on a lot of this already. I think the main points were sort of the impact from the regulatory changes in the U.K. and I and Finland being a little bit worse than expected. Elias, can you just to clarify, you know, relative to the guidance that you put forth at Q4, you know, what has changed incrementally?

Elias Mark, Chief Financial Officer, Gambling.com Group: Yeah. What’s changed incrementally is a faster shift in away from SEO channels that we had anticipated to see this shift, but it has happened a little bit faster than we expected. If we look at how that affects the numbers from how we initially guided, you will have a lowering of revenue expectations by around EUR 5 million. That comes from carrying forward the lower SEO run rate in the business. You will have an increase in cost of sales of approximately EUR 5 million, which comes from the mix shift, and that is offset by around EUR 5 million of lower adjusted operating expenses.

Within that, we expect to save around EUR six and a half million from the restructuring as discussed, which is partly offset by about EUR one and a half million of higher marketing expenses. That’s kind of the bridge, if you like, but it’s all driven by the mix shift expectations.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: It’s important to think about this year in kind of 2 halves, right? H1 and H2. The mix shift is accelerating. There’s the SEO side, but there’s also the non-SEO side of the marketing business, which is growing, at a slightly, you know, different profile. As we go into H2, you know, we’re gonna have a significantly better cost base to match where our revenue mix is at, and we expect, you know, revenue, EBITDA and cash flow to accelerate in H2. We think the kinda second half of the year is gonna be quite strong. We’re saying that, look, some of this impact is gonna persist through Q2, but starting in Q3, then definitely into Q4, we’ll be in a much stronger position.

Jeffrey Stantial, Analyst, Stifel: That’s great. Thanks very much.

Operator: Thank you. The next question comes from Barry Jonas from Truist Securities. Please proceed with your question, Barry.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group0: Hey, guys. This is Jeremy on for Barry. Thanks for taking our questions. Can you just explain to us the timing for the management change announced, and is this a signal for any changes to your overall strategy?

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: Hey, Jeremy. Charles here. It’s all racked up and Kevin’s, you know, more or less already operating as the group CEO. We wanted to, you know, present a very choreographed and planned transition. We have our AGM next week, and at the conclusion of the AGM, we’re going to have some new directors joining us, and Kevin will be official next week. Yeah, in terms of the strategy, you know, Charles and I are aligned on the group strategy. With the restructure and focus on AI first workflows, I’ll be changing how we operate the team to achieve the vision. That is something we’d be doing with or without the succession taking place. Charles is a technologist and will continue supporting strategy and ideas around AI frontier opportunities.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: We’re focusing resources on opportunities that have the highest ROI. SEO is still a great business, albeit with lower growth opportunities, so we’re shifting resources to other areas and we’ll continue to do so. AI will also enable us to scale the business without having to continue growing the team. Even if, you know, revenue goes up substantially, we don’t expect team size to match that. You know, Charles and I have been on the same page for a long time, and the strategy is roughly the same.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group0: Got it. That’s helpful. How has your prediction market revenue been trending, and what’s the level of growth you’re seeing from those customers? Thanks.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Prediction market operators are keen to acquire customers. We are seeing the CPA as offered are lower than we’ve seen from sportsbooks. You know, now and kind of at the peak on the, on the data side, we’ve discussed OpticOdds servicing, network of traders and market makers that surround prediction markets. That’s continuing. In Q1, we started to send more traffic, affiliate traffic to prediction markets as well. We expect that to continue to ramp throughout the year. It’s an additive new type of partner for us, which is important. You know, it’s, you know, continuing, it’s not, you know, massively different than what we described in Q4, there’s, you know, positive momentum. Obviously, prediction markets are taking a lot of mind share as well, we’re trying to ride that.

Operator: Barry, do you have any further questions?

Thank you. That’s it.

Okay. Ladies and gentlemen, just a reminder, The next question comes from Chad Beynon from Macquarie. Please proceed with your questions, Chad.

Chad Beynon, Analyst, Macquarie: Hi. Good afternoon, all. Thanks for taking my question. Elias and team, I just wanted to go back to the guidance for a second. Revs at the midpoint down by 8, EBITDA down by EUR 7. Elias, I know you walked through some of the things, but with the EUR 7 million of saves from the restructuring, what is gonna be the bridge down from that adjusted number? What’s the main impact? Is it an investment in the marketing expenses? ’Cause I feel like some of the other things you mentioned kind of netted out.

Just trying to get a sense of the margin guide down from looks like 28% at the mid, Or I’m sorry, 30% down to 28%, and when we’ll see, those increases in marketing expenses, if that’s what it is. Thank you.

Elias Mark, Chief Financial Officer, Gambling.com Group: We’ve already seen the increases, some increases in marketing expense at the run rate basis. If we look at the cost side, we’re expecting about EUR 6.5 million of cost savings to come through in the second half of the year from the restructure. We expect that to be largely offset by increases in marketing expenses of about EUR 1.5 million and increases in cost of sales, which comes from the growth in the partner platform primarily, of around EUR 5 million.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Kevin here, Chad. It’s worth noting that, you know, the broad strokes of the restructure driven, and the cost-cutting associated were partially anticipated in the guidance previously given. We had been thinking about this for a while. We weren’t quite ready to do it. We are now, so that’s why we made the decision. It’s not a total savings from guidance. That was somewhat baked in.

Chad Beynon, Analyst, Macquarie: Okay. Perfect. Thank you. On the buyback or capital allocation here, I’m assuming just given the needs of the capital for the earn-out and current leverage, do you have much flexibility to buy back stock at these levels? I know you had, you know, repurchased some in the fourth quarter. This quarter, you hadn’t. What’s your appetite with the stock at these levels and adjusted visibility on the cash flow side?

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Our focus is on de-levering the balance sheet. We’re always interested in ways to grow the business, but we don’t plan on, and, you know, manage the stock as well, but we did not plan on doing buybacks in the short term. Free cash flow and free cash flow conversion should improve over the second half. It could open opportunities, but right now we wanna use our cash to de-lever, and that’s the primary target.

Chad Beynon, Analyst, Macquarie: Okay. Thanks, Kevin. Best of luck with everything, Charles. Great to work with you.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Thanks, Chad.

Operator: Thank you. The next question comes from Mike Hickey from StoneX. Please proceed with your questions, Mike.

Mike Hickey, Analyst, StoneX: Thank you. Hey, Kevin McCrystle, Charles Gillespie, Elias Mark, Peter McGough, thanks for taking our questions. Just 2. First on marketing. Trying not to be redundant here, but if you can sort of discuss maybe your non-SEO traffic diversification initiatives and how those are sort of balancing against, you know, the search pressure obviously that’s been ongoing. When you think the business sort of reaches a tipping point where SEO volatility starts to become less impactful in the near term. You may have said fourth Q on that, but I wasn’t 100% sure if that was just because of the cost reductions versus just the balancing of the mix within the segment. Kevin McCrystle, I know you’re guarded, but you have announced a new product initiative as well, so it’d be great to get an update there.

We have a second question.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: I’ll answer the second part first. You know, going forward, we’ll talk about new products when they’re live in the market, so I’m not gonna go over that today. In terms of the non-SEO diversification, look, this is the second quarter where non-SEO was larger than SEO. It was, you know, close to 60% of the marketing business in Q1. The non-SEO is growing rapidly across CRM, paid media, LLM referrals, and the audience monetization platform. You know, non-SEO is a higher percentage of our marketing business in Q1 than Q4. I think we’re nearing that tipping point, if not at that tipping point you mentioned, where non-SEO growth more than offsets SEO headwinds. There’s some encouraging trajectory that we’re seeing here recently. CRM is the most compelling opportunity there.

It plays nicely with all the other channels, and it’s fundamentally a re-engagement and conversion tool for audiences developed through every channel. You know, paid media is a big space. We’ve been careful not to scale too fast given the payback’s not immediate. Apps and social communities are areas where we see significant opportunity to develop deep connections with key consumer cohorts. We’re also, you know, just doing a lot of testing all over the place. AI automation is opening up possibilities that would not have been feasible until very recently. You know, the partner audience monetization platform also diversifies us from SEO, so it helps there as well. You know, I think we pretty much are at that tipping point. We’ve been talking about this mix shift for a while.

It’s, you know, moved even a little faster in Q1 than expected, and Q2 will be roughly similar. That’s part of, you know, this reset of the team will better align resources where we see growth going forward.

Mike Hickey, Analyst, StoneX: Thank you. On the second question on data continues to be a strong segment. Can you just talk about maybe the biggest drivers behind the recent acceleration of OpticOdds partner growth and how sustainable you think that enterprise demand can be for you? On the new customer wins, are these, sounds like it’s more than just traditional sportsbook. Sounds like prediction market, you know, some AI engines here, media companies. I guess where you’re seeing these new customers coming from beyond just traditional sportsbooks. I got a wildcard.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: I’ll wait for the wildcard. To start, we definitely see the growth to be consistent going forward. It’s one of the best parts about that business. The core strategy remains consistent with Q4. We wanna add new customers, especially by tapping into international markets and non-sportsbook partners. Customers were up 24% Q4 to Q1. International penetration has gone from 15% to 28% of active customers over the past year. We’re layering on new features which react to partner needs, and the multi-product adoption is accelerating across the platform. You know, we mentioned the AI, you know, the focus is on deeper LLM integration to help our partners maximize value. Claude has integration and has been a hit. This Perplexity one is really interesting. That’s not live yet. That’ll be live soon.

I’m glad we can talk about it though. It’s just a way for people to engage with the data we have and, you know, the tools that they’re using elsewhere.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: It gives the company direct exposure to the growth and user adoption on these next generation AI platforms. I mean, it’s exactly where we wanna be with our product.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Yeah. In terms of the non-sportsbook partners besides the kind of AI stuff, you know, there’s some of the prediction market ecosystem, you know, traders or market makers. There’s various media companies. You know, we sell data to sports teams, all kinds of stuff. You know, on the operator side, though, there’s You know, we sell to everybody, and if you think about it, there’s more small and medium operators than large ones. That naturally creates potential for a new deal pipeline. You know, we have different solutions for each type, and the deal size does not necessarily correlate to the operator size. It just depends on how much of the Optic stack they’re integrating with. So we’re continuing to innovate there and, just reacting to what the market’s looking for.

Mike Hickey, Analyst, StoneX: The wildcard question, guys. It just sort of occurred to us. Your name Gambling.com just doesn’t seem to really represent who you are today and where your growth is in the future. Have you guys thought of sort of rebranding or changing your name?

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: Charles here. Your spider senses are pretty strong, Mike. We are considering something, but of course, we won’t talk about that until it’s ready to go. Gambling.com, the product at this point is a smaller portion of Gambling.com Group, the business’s overall portfolio than it’s probably ever been. Thus, I would agree that there is some potential merit and logic to thinking about a different brand.

Mike Hickey, Analyst, StoneX: All right, guys. Thank you. Best of luck. Charles, take care. Hope to see you soon. Bye.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Sure.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: Bye.

Operator: Thank you. The next question comes from Clark Lampen from BTIG. Please proceed with your question, Clark.

Clark Lampen, Analyst, BTIG: Thanks very much. Good evening, everybody. I have two. The first one is on gross margin trajectory. Just trying to think about, I guess, sort of medium-term direction. It sounds like, with the non-SEO business growing to represent, more and more of the revenue mix, I know that there are a lot of different channels sort of bundled underneath, I guess, this sort of the non-SEO blanket term. I’m just curious, are there meaningfully different media costs associated with, you know, like some of those different channels such that, we should think about, gross margins in 2027 being meaningfully different than what we’re seeing, I guess, in sort of 2026? Second question that I have, and then I’ll leave it there, is just on what you guys are seeing in terms of customer acquisition costs.

Maybe not so much in Q1, but in the early stages of Q2, and as we progress towards some of the bigger events, over the balance of the year with World Cup and then the start of the NFL season. Some operators have called out, very different trends from an acquisition cost standpoint, i.e., significant increases that have essentially priced them out of the market. Others have said, there’s been some easing lately. Just would be great to get your perspective on where we are now and where we’re going. Thanks a lot.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Take the first one first. On gross margin, yeah, that’s primarily on the marketing business, though there’s some elements on the consumer side of the sports data. We have already seen a large uptick in that on the marketing business. You know, that the gross margins will continue to grow, proportionally should not. I think that’s now at a level that makes sense. I wouldn’t expect very significant shift there. As the sports data B2B side grows, that’s, you know, not really as dependent on gross margin. We expect that to stay, you know, relatively stable from where we’re at now. On acquisition costs, look, we’re in a lot of different markets around the world, I think it’s a totally different picture in every market for every product type.

The World Cup’s coming. You know, we do see that too. Historically, these big events are pretty low LTV customers, often that even means just, you know, rev share deals for us on those. We expect the World Cup to be that more of an NDC opportunity than an immediate revenue opportunity. You know, the prediction markets are obviously starting to take some mind share in the U.S., we’re starting to see competition change a little bit. The prediction market CPAs are quite low. We’re seeing a lot of the traditional operators in the U.S. focus more on the casino side where they’re, you know, they kind of own the space a bit more. Those CPAs are holding up. We’re not seeing big change there.

I think, you know, on the U.S. side of the business, the operators are seeing their CPAs go up generally because of this new competition across all their channels, not necessarily affiliate. I think particularly on the branding side, it’s a little bit more challenging for them to get in front of users with, you know, everybody referencing prediction market data in the media and social. That’s having an impact on them. Our rates are really not that different. You know, it’s just based on LTV, right? As long as we’re providing a strong LTV, we can kind of work with them on finding the right value.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: Clark, I’ll just give you a little more color on the non-SEO channel margin profile. You know, if you think about CRM, you know, the margins are enormous because there’s no paid, there’s no COGS per se. It’s just our team running it. You know, you’ve also got paid media, which has, you know, very meaningful COGS. Yeah, when you look at it all together, it blends down to a nice business. There are very different margin profiles within those different non-SEO channels.

Kevin McCrystle, Co-founder and incoming Chief Executive Officer, Gambling.com Group: Yeah. When we think about, you know, the business differently, like just what’s the contribution from each item. If you look at some of the businesses, like a content-driven business is really heavy on OpEx, less so on COGS. We have some other channels which may have more cost of sales, but lower OpEx. We’re just trying to kind of manage each of those individually and then blend together. Again, I think, you know, the gross margin’s not gonna go back to where it was, but it shouldn’t meaningfully change from here. Our overall margin should increase starting in H2.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: You know, we expect to be back in H2 to the, you know, 30s on margin.

Clark Lampen, Analyst, BTIG: Thanks, guys.

Charles Gillespie, Co-founder and Chief Executive Officer (transitioning to Executive Chairman), Gambling.com Group: EBITDA margin, specifically, not gross margin.

Operator: Thank you. There are no further questions, and this does conclude today’s conference. Ladies and gentlemen, thank you very much for joining us today. You may now disconnect your lines.