GAMB · Grandstand Limited

Gambling.com Group reported first quarter 2026 results that were largely in line with expectations on revenue but showed significant pressure on profitability. Revenue of $40.4 million was flat year-over-year, as a 13% increase in sports data services revenue to $11.2 million was offset by a 5% decline in marketing services revenue to $29.2 million. The marketing decline was attributed to poor organic search dynamics and regulatory headwinds in the UK and Finland, partially offset by growth from diversified traffic sources. Gross profit fell 11% to $34.4 million as cost of sales surged 171% to $6.1 million, reflecting higher costs from traffic diversification strategies. Operating expenses excluding certain items grew 12% to $28.2 million, driven by higher AI subscription costs and external marketing expenses. As a result, Adjusted EBITDA dropped 43% to $9.0 million, with margin contracting from 39% to 22%. Net loss attributable to shareholders was $1.2 million compared to net income of $11.2 million in the prior year, impacted by lower operating profit, higher interest and tax expenses, and the absence of favorable foreign exchange finance income. The company also adjusted its full year 2026 guidance, now expecting revenue of $165 million to $170 million and Adjusted EBITDA of $45 million to $50 million, reflecting continued headwinds in marketing and investments in new products. Management announced a strategic restructure expected to reduce the workforce by 25% and deliver $13 million in annualized savings, with about half realized in the second half of 2026. The restructure is part of an AI-first transformation aimed at improving efficiency and margin expansion. Cash flow from operations was $0.9 million, down from $8.1 million, due to lower operating profit and higher payments for deferred consideration, transaction bonuses, and taxes. Adjusted free cash flow was $3.9 million, down from $10.3 million. The company ended the quarter with $8.4 million in cash and $121.3 million in borrowings under its credit facility, having repaid $2.8 million on its term loan. No shares were repurchased in the quarter, with $14.4 million remaining on the buyback authorization.