Kambi Group Stock

Hello, and welcome to Kambi's Q2 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. The agenda for today. We will start with some highlights from Werner, which will be followed by the financial summary by David, then Werner will come back with some operational updates. Following this, there will be time for the Q&A.

With that, I would like to hand over the conference to you, Werner. Please go ahead.

Thanks, Mattias. And good morning, everyone. Q2 and the weeks following have been a fantastic business period for Kambi, as our report shows this morning. While the World Cup went just about as well as we could hoped, our performance prior to the World Cup had also been strong.

This morning, we posted a 13% increase in Q2 revenue, with EBITA (acq) doubling year-on-year. With that growth coming despite the payment of credits for operational issues we had in April as discussed. As a result, we are today increasing our EBITA (acq) guidance from 2025, now to EUR 23 million to EUR 27 million. This increase is part due to the World Cup, where we outperformed our high expectations, processing more than 100 million bets, turnover in excess of EUR 1 billion and an operator trading margin of 18%. And that's just only for Turnkey and does not include our Odds Feed+ services.

And in terms of new business, at the start of the quarter, we signed a partnership with a group of Canadian lotteries giving us access to 7 more provinces in Canada. Since the quarter end, we added Pure Casino on our Turnkey in newly regulated Alberta, along with RETABET in Spain and Peru for Odds Feed+ service.

And of course, I'll talk more about all these shortly. But first, over to you, David.

Thank you, Werner. Good morning, everyone. Let me start with the headline numbers for Q2. We delivered EUR 45.9 million of revenue, which is up year-on-year versus EUR 40.5 million last year. Operating expenses were EUR 31.5 million, down from EUR 31.7 million in the prior year quarter. And that's operating discipline translated into a material increase in profitability. Adjusted earnings before interest tax and amortization on acquisitions or adjusted EBITA (acq) came in at EUR 7.6 million, up from EUR 3.7 million last year.

We continue to grow the top line while keeping a tight grip on cost. So the incremental revenue is dropping through and increasing our profit. The extremely strong World Cup results continued into Q3, with the final finishing late on Sunday evening.

Our outperformance on the whole tournament is the key factor in us today raising our expected full year adjusted EBITA (acq) from EUR 20 million to EUR 25 million to EUR 23 million to EUR 27 million.

Turning now to the operator trading dynamics, and this slide is where we are monitoring the underlying level of activity in the network on our Turnkey Sportsbook, the main revenue driver in the business. This turnover Index gives you a view of overall betting turnover volumes, originally indexed at 100 when we listed. And the orange line shows the aggregate operator trading margin across the network.

The operator Turnover Index this quarter was 685. As expected, due to the seasonality of the sporting calendar, this was a slight decrease from Q1, where we had the NFL playoffs and March Madness College basketball. This was partially offset in Q2 by the return of the MLB season.

Furthermore, the turnover in the quarter was also boosted by the Football World Cup, although the strong margin did serve to limit the turnover. And certain soccer leagues around the world moved or reduced their seasons around this big tournament. Versus Q2 last year, Kindred and LeoVegas migrations from various markets were more than offset by this World Cup impact and the launches of a number of new customers, resulting in a 2% year-on-year turnover increase.

The operator trading margin was also much higher this year at 14%, which, of course, has the effect of suppressing the level of operator turnover. We saw the strong margin in the World Cup at around 17% during Q2, but also in the rest of the offering, with operator-friendly results in the Champions League also worth noting.

Now let me walk you through the year-on-year change in adjusted EBITA (acq). This bridge explains what drove the move from EUR 3.7 million last year to EUR 7.6 million this quarter. At a high level, the biggest driver is the operating leverage, with revenue growth flowing through whilst the cost base stays controlled.

The first light blue bar represents the impact of the operator trading margin outside of the World Cup. At 13.4%, this was significantly higher than the 11.5% we saw in Q2 last year. Our launches comprise a number of new operators across Turnkey, Front End and Odds Feed+ services, including Ontario Lottery and Gaming and PMU. The third light blue column relates to the net impact of major football tournaments. The FIFA World Cup was a huge success for Kambi and its operators.

In Q2, with over EUR 500 million turnover and around 17% margin, we saw approximately EUR 6 million of revenue. The good results continued into Q3 until the final concluded on Sunday, and at an even higher margin than we saw in Q2, leading to the increase in expected adjusted EBITA (acq) for the full year to EUR 23 million to EUR 27 million.

On this slide, we offset the revenues we had last Q2 from the FIFA Club World Cup and the impact on turnover of the high-margin and adjusted football calendars to show a EUR 4 million year-on-year increase in profit from these tournaments. The migrations column includes various market transitions in the last year by FDJ, United, and LeoVegas.

Whilst the gaming tax and other column includes the year-on-year impact of revised contractual commission rates with certain customers, a greater tax impact in Colombia, amongst other jurisdictions, and the low single-digit millions of credits for technical downtime in April that we mentioned when we released the Q1 report. Our cost of sales, which mainly comprise data costs we charge to customers, increased as our revenue and number of new customers grew, and also included the higher costs associated with the World Cup data.

Our operating expenses were down as we saw the impact from our savings program, with reductions across various cost lines more than offsetting inflationary pressures. The main FX impact at constant currency was a EUR 0.4 million increase in the value of revenues from Colombia due to the stronger peso. All of these factors together resulted in a 102% increase in adjusted EBITA (acq) to EUR 7.6 million. Finally, this slide summarizes the quarter's cash movements. I'm looking at 3 things here really. The cash generation from operating performance, the working capital effects in the period, and then any investing or financing impact. Operating profit for the quarter was EUR 5.8 million. This includes a net EUR 1.3 million realized on the sale of a dormant subsidiary holding a gaming license we no longer needed.

Our working capital position improved as we received an additional EUR 1 million as part of this subsidiary sale to cover a deposit held with the gaming regulator. As we typically see in Q2 each year, the cash outflow in relation to tax was unusually large as we pay our full year annual corporation tax in Malta during Q2. We also used EUR 3.6 million to carry out share buybacks in the quarter.

On that note, in June, we announced a share repurchase program to the value of SEK 100 million or EUR 9.2 million, which will run until November this year. This leaves a closing cash balance of EUR 33 million at the end of June. Passing back to Werner.

Thanks, David. At the start of Q2, we entered into a major partnership in Canada with Atlantic Lottery and British Columbia Lottery to provide our online and retail Turnkey Sportsbook across 7 provinces. Coupled with our partnership with Ontario Lottery as well as our recent launch on day 1 in Alberta, we'll soon be present in 9 of the 10 Canadian provinces.

In May, we signed with Canadian Bank Note, an operator that provides gaming solutions to lotteries in South America, Central America, and the Caribbean. We are already up and running with them, having launched in 5 territories over the past few weeks. Q2 also saw us extend with 2 valued existing customers. First, Desert Diamond, the largest tribal operator in Arizona; and second, BetWarrior, a strategically important partner for us in Latin America and one of the leading operators in Argentina.

We've also been busy on the commercial side following the close of the quarter. We recently signed with Pure Casino, one of the longest-standing retail casino operators in Alberta, a market which regulated just 2 weeks ago. We provide Pure with our online and retail sportsbook with the online launch set to take place in the coming weeks. In recent days, we increased our Odds Feed+ partner roster with the signing of RETABET, an operator in the Spanish and Peruvian market.

In addition, we expanded our partnership with our tribal partner, 4 Bears in North Dakota, taking also our new player account management system to enable them to launch on reservation mobile. This marks the first commercial agreement for the PAM we acquired last year, and I anticipate more to come in the near future.

The 2026 FIFA World Cup was without doubt the biggest event in the sports betting industry. And as such, we had a great product to match. Our AI trading system enables us and our partners to offer a near limitless offering with an expansion in player props and combatability giving sports fans incredible choice. To illustrate this point, in the World Cup final, so in only this one game, we saw more than 1 million unique combinations that were placed.

A number almost inconceivable a few years ago and certainly impossible to deliver through manual trading. Our AI trading system priced and traded all 104 games pretty much alive, delivering a product of high quality without the need to increase the number of human traders as we noted other companies had.

Not only did AI automation result in a vast offering, but also one with an improved user experience by reducing live delays, minimizing suspension times and maximizing bet acceptance. This is seen in the sharp increase in live Bet Builders, which made up 22% of all live bets, up from just 3% in 2022 with the last World Cup, largely enabled by these UX improvements we delivered.

With our offering now automated, others still reliant on manual trading will need to scale back down now to a lighter offering with all the domestic leagues, the Premier League, as an example, starting soon again. We will not have this need to scale anything down. The World Cup further demonstrated the changing nature of sports betting, particularly with an expansive Bet Builder.

This high-quality product means players are increasingly engaged by higher-margin products, meaning financial performance is now less reliant on who wins the match than previously. Pre- World Cup, we also delivered various improvements to our front-end user interface, providing our partners with even greater flexibility while also expanding our range of bonuses and rewards, which, as we'll discuss on the next slide, proved crucial considering the high trading margin achieved throughout the tournament.

It should also be noted that despite the incredible volumes we saw, we experienced zero downtime. So we had 100% uptime during the tournament. Across the whole tournament, we saw more than 100 million bets in excess of EUR 1 billion in turnover through our Turnkey product with much more real Odds Feed+. Average turnover per match was up around 20% versus the last 2022 World Cup, with the increase even more stark in the later stages.

Average stake size also increased. Our operator trading margin for the tournament was 18%, with GGR for our partners 3x up what it was in 2022. And with Bet Builders playing a leading role, driving 35% of all bets throughout the tournament across pre-match and live. Our Latin American network played a big role in our success, particularly during the earlier rounds where match times weren't friendly for the European audience.

Over the course of the tournament, 46% of our turnover came from the South American region. And as you can see from our rolling operator trading margin chart, we quickly hit a constant trading margin level, driven by our improved products and our global partner network, which contributed to more balanced liabilities.

Given the context of our 14% Q2 margin, along with a steady increase in margin over the past few quarters, we have shown that by offering an engaging sportsbook, high-quality trading and risk management, we can deliver improved results. This places even greater emphasis on the difference between an average sportsbook and a truly leading one, and we have the latter.

We are conscious that a too high margin can negatively impact turnover, as already David said as well. I mentioned bonuses and rewards. What this higher trading margin we deliver can also provide is greater flexibility for our customers. They can use this additional money we make for them from our high margin to reward their partners and players even more with bonuses and incentives.

So if they wish, they can give back a bit of this high margin to their punters and be more aggressive on bonusing, on incentives, on engagements to take more market share. So in general, the World Cup was fantastic for our business, not only because we delivered a strong margin, but also because it underlined the fact we have built a leading product and a highly efficient automated product that performed flawlessly during the busiest sports betting event in the world, positioning us strongly for the future.

Here is a slide we presented already last quarter. And given our advancements in AI trading, along with the success we had during the World Cup, I wanted to present it again as a reminder of the moat we are building. This is all about the data advantage we have and being an AI first mover, driven by our low global liquidity and importantly, what we're now doing with that data through our trading system.

We've accelerated the development of this automated system to enable us to transition more sports. And now we have 5 sports in production where AI is pricing and trading. This is soccer, basketball, tennis, baseball, and ice hockey. For basketball and ice hockey, we are waiting, of course, for the resumption of the NBA and the NHL to trade at full scale, starting in a few weeks.

In recent weeks, the Roland-Garros and Wimbledon tennis tournaments were traded by our AI. And effectively, we're trading all tennis now also on AI. Looking ahead, we are about to go in for testing also now with American football with the start of the NFL season in September, while we also start to work to transition more sports, table tennis, volleyball, esports, to give you some examples being on our road map here.

This will mean we will have, soon more than 90% of our turnover channels through our proprietary AI system, in turn delivering a leading quality product for all the key sports to our partners. And of course, this also creates a more attractive sales proposition for prospective new customers, which could expand our network on a data advantage even further.

So to summarize, Q2 was an exceptionally good quarter for Kambi, with a strong financial performance leading to us increasing our full year EBITA (acq) guidance to EUR 23 million to EUR 27 million. This performance was boosted by a highly successful FIFA World Cup, with improvements to our products, driving increased engagement with high-margin products, and all games traded and managed by our automated AI trading system.

The World Cup has underlined the edge we have with our AI trading system. And we are accelerating the transition of sports to technology with 5 sports already complete and more to come over the following months. While there is still work to do, Q2 built on the solid momentum established in Q1. We have turned the corner and returned to growth. Our focus is now on sustaining this positive momentum through the second half of the year and beyond.

Thank you, Werner. As there are no participants on the teleconference, I will move straight into the webcast. So I'll read the question and we'll see.

To give some understanding of the revenue and impact from the World Cup, can you briefly give some general color on Kambi's invoicing and cash flow in relation to placed bets? After a bet is placed and finalized, are you sending the invoice instantly? Or are these -- are there some days delay, meaning bets placed in June can be revenue first in July?

Okay. So let me take first how we recognize revenue, as that depends on when the bet is settled. So if an event happens before the end of 30th of June, it's recognized in June. That event is then -- or that revenue is then invoiced to the operators during July and then paid within 30 days, so probably likely during August. So in that respect, all of the cash related to that we make from the World Cup will be coming in July and August and September.

Okay. And then a question on esports. We reported higher growth and player value in esports such as esoccer players generating higher GGR, how important will this vertical be in the overall growth going forward?

Also, given the high frequency always on nature of these products, do you view player behavior in these segments as structurally moving closer to an iGaming product?

Yes. So esports, particularly esoccer and ebasketball, we always distinguish internally between these more esports style things like soccer and basketball and Dota, League of Legends, the classic esports games. So especially esoccer and ebasketball are really driving our business. Esports is already, when we order the size of this business, our sports #4, and it's also one with continued growth.

We saw also now, let's say, in the half-time breaks during the World Cup, as an example, a lot of engagement and activity on esoccer, as an example, to bridge these 15, 20 minutes. So yes, esports is an important product, growing for quite a while now, and we expect also more growth going forward.

Thank you. And then coming back to you, David. Regarding the EUR 9.4 million standby letter of credit, why does a new operator require the collateral from you? And when is it released?

It will stay in place as long as we have the operating contract with that operator. They wanted it as a, I guess, a security over our ability to settle any liabilities during the term of the contract. We never have such liabilities historically. So hopefully, it's never called upon, but it's there as a safeguard, I guess, for them. But it'll be released as soon as we no longer work with them.

Thank you. And next question. Cost of sales keeps rising relative to revenue. Is anything other than data supply costs driving it?

It's virtually all data supply costs. It does look high this quarter, it's a couple of things. One, we had the World Cup. The World Cup game is classified as a premium data cost, so it comes at a high cost, which is fully recharged to the operators for that high-quality data to drive the World Cup.

Secondly, Odds Feed+. We still get data costs which are passed to operators. On Odds Feed+, the revenue base is much smaller. So as Odds Feed+ grows as a bigger part of our business, proportionately data costs will get a little bit higher. But I must stress, all data costs are recharged, so they all net zero on the bottom line.

Okay, thanks. Next, I guess, for you as well, David. What are your plans for capital allocation with the buildup of the cash position? And discussions on introducing a dividend?

For now, we've been very clear, and the Board has been very clear about that we'll use it predominantly for share buybacks. So for the foreseeable future, that remains the policy. And yes, that's I guess all I have to say at the moment that there's a clear policy available on the website.

Thanks. With the growing product mix of higher-margin products, have you started to consider raising the long-term sportsbook margin guidance?

It's on our mind because we've seen such extraordinary margins, particularly in the last quarter, and it's been relatively high over the last in recent times. But looking back the last 8 quarters, I think it averages around 11%. So we don't want to be reactionary and change our guidance every time there's a certain quarter with a certain margin. We will look at it again, probably most likely, I'd suggest at the Q4 report when we set out next year's numbers.

Next question on prediction markets. There were news out in the U.S. the other day that prediction markets took an estimated near 30% of U.S. sports betting volume during the World Cup. What do you make of this in future perspective? How is Kambi facing this angle of rising competition for customers?

30% of the U.S. population is living in Texas and California, where sports betting is not regulated yet. So I think you have your answer where they made their 30%.

And what do you think about the future development in this regard?

Yes. I think we're all looking forward to get some final court decisions in the U.S. Expectation is that we will have this clarity, hopefully next year, eventually, already early next year. As I said before, we are in a wait-and-see position. I would say, even more than that. We, of course, in the background, evaluating options, partnerships, developing it in-house, on our own as well.

We are prepared for this being eventually legal in the future in the U.S. As it stands now, being licensed in 70-plus jurisdictions, we can't start acting on prediction markets. But if this product is considered to be fully legal and licensed, particularly in the U.S., we'll be able to serve our partners.

Okay. And then a few questions in one, but I'll read them one by one. Firstly, all else equal, would the guidance range for 2026 adjusted EBITA be different had it not been for the April issues?

All things being equal, yes, it would have been higher. I mean it was low single-digit million euro straight to our bottom line. So yes, we want to be very open, but it was a very strong quarter. It was able to absorb those numbers. But yes, it would've been higher by that much.

Yes. Could you please provide us with an update on the regulatory process in Wisconsin?

There are no major updates. I think talks between mainly the tribes and the government are ongoing. We expect results eventually later in autumn, early winter this year. So there is a chance that we can go live beginning next year or so, in Wisconsin, which would be great for us with our existing relationships we have. But so far, no results of these talks have been communicated.

And then the last one of this three-header. You mentioned that the high operator trading margin could enable your customers to increasingly reward punters with higher bonuses, for example. How have operators behaved historically with respect to bonus increases when they have earned high operator trading margins in connection with large events?

Yes. That's something we discussed, of course, a lot in the last few quarters already with our existing partners that with the operator margin going up and up and up again, of course, they make more money now, right? So is this still healthy or not, this high margin? This is the big question in the room, I think. And they have now several options, right? One is to decrease the hold they take, so to increase the payout rate, to have more attractive odds. That's one way. Many of our existing customers already started the other way, and the way is to spend even more money on bonuses.

So to keep the payout rates where they are, to have very competitive leading odds, not to go more aggressive on odds, but to use the additional money, probably partly taking down pocket, of course, but to use partly this additional money to be even more aggressive with bonuses, with free bets, et cetera, to keep their customers engaged, which will drive, of course, additional revenue and keep engagement and recurring revenues high.

Next question. Why are you not trying to adjust the front-end interface to be even more appealing for new players entrants in the market that now -- that are now captured by predicted markets?

Yes. So we did a big update prior to the World Cup for our front-end. And what are we doing on the front-end is being a B2B supplier, always driven by our customers, by our partners. They engage directly with their sports fans. We, of course, have a lot of data we can work with on AI about user behavior, et cetera. But when it comes to the front-end, our partners have a big say. They want to be flexible, they want to be unique with their front-end. So we have a lot of great ideas.

And now particularly with AI, there are so many more options in personalization, hyperpersonalization, better recommendations, whatever. I think the user interface will change going forward. The old grid, the long lists of bets and bets offers, probably something from the past, looking to ChatGPT and simple prompts, I expect us to see soon some new front-end interfaces. But I'm in the industry for a while.

I've heard a lot of talks about in the U.S., user interfaces will look very different when the U.S. will launch. Nothing happened so far. We've seen some start-ups not being very successful with the new style of user interfaces. Leveraging the AI capabilities, to be honest. But I think we will see some change soon.

And we, as Kambi, we are ready with our AI trading system and platform to deliver completely new disrupted interfaces if there is a demand and if this is really driving more revenue.

All right. According to your own definition of adjusted EBITA -- no, sorry, this one we take. No, sorry. Sorry, the questions are jumping around here. Could you confirm that this one we did take. Could you elaborate near-term expectation now that the operater trading volume was so high in Q2? Will that indirectly mean muted player funds and turnover in Q3? Or how do you reason about this?

I think yes is the short answer. And it's why not all of the extra revenue we see from the World Cup necessarily feeds through into our full year outlook because this is an unprecedented tournament in terms of the financial results, the turnover, the margin, the geographical location of where we were making the money. It's really hard to predict the full knock-on effect of that very high margin. But as we've always said, turnover is negatively correlated with high margins.

It will have an effect on the short term until the margins return back to a more normal level. We do expect that to happen, that the turnover levels come back up. But short term, whether it's 2 months, 3 months, I think there will be a short-term effect that is factored in then to the outlook we've given.

I'd like to add something here. So how much this high margin and great profitability for the betting operators will impact activity, turnover, margin in the next few months is something to see. Clearly, a World Cup like this is a one-off, right? But historically, looking back to the last years, for the operators and also us as a B2B provider, the World Cup was always most importantly about acquisition of new customers.

So we saw 24% of the bets placed on this tournament from completely new customers acquired by our partners. And this is what you always see in the quarters coming, high activity, more active customers having been acquired during this World Cup. So this is also the other effect. So will there be high activity? Are there more engaged punters now placing bets? And of course, we had a high margin. So we'll need to see how this balances out.

Given the growing market demand for sophisticated product, combined with a stricter focus on profitability and free cash flow, are you seeing a shift in the pipeline where more Tier 1 and Tier 2 operators are looking to return to outsourced solutions?

The short answer is yes. Not only because we have a great product. I think in general, that many -- even of the biggest Tier 0, Tier 1 operators, they moved away from pricing, trading all 60, 70 sports in-house. That's our attack angle also for Odds Feed+, right? 30% of the global betting turnover are outsourced to B2B suppliers like us. 70% of betting turnover still happens in in-house sportsbooks. That's where we think with our new Odds Feed+ product, we have a premium leading Odds Feed+ product better than what anyone can offer out there. So that's actually what we want to achieve with the Odds Feed+ product, to offer our AI-traded odds with much higher user experience to the big Tier 0, Tier 1 operators.

Could you provide an update on Nevada and Wisconsin? I guess Wisconsin we already touched upon, but Nevada, what's going on?

Yes. We can't. But eventually, we'll see some updates soon about it.

What are you planning on doing with the shares you buy back?

Two things really. One, majority will be canceled to reduce number of shares in issue. A small number will be held aside to satisfy share options that may be exercised in the future, but yes, largely canceled.

According to your own definition of adjusted EBITA, you exclude items affecting comparability. However, you did not adjust for the penalty this quarter. Could you explain the reasoning behind this?

Yes. I mean, in one way, we didn't think you should look at that as completely exceptional. Of course, it hasn't happened to that extent to us very often, but it's part of the business, things can go wrong.

And just because it doesn't happen very often to us doesn't mean we wanted to exclude it from -- to inflate our profits. So these are things -- this is a risk we manage every day. Unfortunately, we had one incident that hurt us, but we didn't want to put that to one side.

How did your modules, particularly Odds Feed+ performed during the quarter?

Yes, they performed very well. I mentioned the EUR 1 billion turnover we had on turnkey only. We had some material turnover also on Odds Feed+. So it's not a small revenue with customers like Hard Rock, LeoVegas, Rei do Pitaco taking Odds Feed+ from us for the World Cup. So it's growing. It's faster growing than our turnkey.

We've a lot of hope for this product and also for the World Cup, although we don't see the bets coming back and we don't know exactly the settlement of these bets because it's an Odds Feed+ service, we saw big volumes.

The number of employees declined during the first half of the year. Should we expect headcount to continue declining in the second half?

Yes. I mean that's clearly the trend, and Werner's talked about the rollout of AI and that we're coming at the start of that journey in terms of what it means for our headcount, ultimately. So yes, I mean, that has come down under 1,000 now, and I think we'll see that journey likely continue.

Okay. I think this one is for you, David. Can you confirm that your Q2 adjusted EBITA (acq) was around EUR 10 million compared with EUR 3.8 million in the last quarter, if adjusted also for the credits technical downtime in the quarter?

Yes, that's broadly correct. Yes.

On your World Cup performance, fully traded by AI, how much do you expect that the transition to AI trading impacted the higher operating trading margin in the quarter?

That's a tough question because we started already 4 years ago to build this product and to gradually roll it out. So we are seeing the improvements from this product now for many quarters. So I can't answer this exactly, not having a benchmark to compare it exactly with.

The best thing I think you can look at it is simply looking and watching also the earnings calls of the betting operators going out, and if they also achieved an 18% margin on the tournament and a 14% margin during Q2.

Could you please provide -- more on the same topic. Could you please provide more color on your World Cup margins? How much variation in margin -- the variation in margins by geography?

Yes, not so much. In the early phases of the tournament with not so friendly starting times for the European audience. We saw a lot more bets, of course, from South America and North America. This changed now in the final knockout phase, where we saw a lot of times in Europe. So there is not a big difference. There are some more challenging markets like Brazil, where the number of what we call wise guys is a bit higher than in Europe or North America.

Also when it comes to fraud betting and things like that, country per country is a little bit different. It depends also on the regulation, of course. if you're allowed to limit or block fraud punters or not, which in some jurisdictions is not even possible.

Overall, margin wasn't very different. Stake size, of course, is different in South America to North America as an example, right, the average stake size. But the margin is not so different comparing the regions to each other.

Okay. Could you please help us to understand the materiality of new contract wins and the shape of the deal pipeline?

Yes. So I think we normally do not comment on the details of our pipeline. The only thing I can say about our sales pipeline is that it's looking as good as also in the last few quarters, not worse, probably even a little bit better, but that's probably only my gut feeling. So looking to the numbers and the CRM system, I'm quite optimistic about what's coming, also even near term eventually. So this is all good.

And then how is Kindred and LeoVegas migrations proceeding? Any news on that end?

No news in the last few quarters, I think. And I need to ask you to go back to ask them about their plans going forward. So we can't comment on the plans for the next quarters for Kindred and LeoVegas as long as they haven't disclosed them.

And then H1 adjusted EBITA is already EUR 13.3 million or roughly 50% of the low end of the new full year guidance. What are you seeing in the second half that keeps the raise conservative? Is there a specific migration acceleration or cost item we should be aware of?

I'd particularly call out the margin. Obviously, the margin has been high in H1. And right now, we don't -- we're still sticking at 11% for the rest of the year as we stand here today. So that's the single biggest kind of discrepancy H1 to H2.

There will be some migrations we expect with LeoVegas just talked about they did migrate Sweden in April. So we'll get a full half of that effect. So there were some of the smaller things, but that margin really is the one to look out for.

Yes. I think we're expecting a little bit of quieter Q3 now, although domestic soccer leagues, also NBA, NFL coming back later more September, right, August, September. Q4 probably will always be as always the strongest quarter. Q3 more silent.

Yes. And then last question, how has the OLG launch developed versus the expectations?

No big surprise. We are super happy with Ontario Lottery as new customers. Of course, now also with their big, big, big retail presence in Ontario, we saw a lot of casual punters now placing bets during the World Cup. Interestingly, in the U.S., we couldn't see a big hype because of the World Cup.

But in Canada, the interest was higher. Latin America was clearly crazy, driving a lot of revenue and business for us in the World Cup. But Ontario Lottery, I would say, is performing absolutely as expected, a very good partner to work with.

Thank you. And that concludes the presentation. Thank you, everyone, for listening in, and we're looking forward to see you again in November.

Good morning, everyone. And welcome to Kambi's Q1 Earnings Call. [Operator Instructions] After the speaker presentations, there will be time for questions and answers. [Operator Instructions] Please be advised that today's conference is being recorded.

So, the agenda for today, we will start with some highlights from Werner, which will be followed by the financial summary by David Kenyon, and then Werner will come back with some operational updates. Following this, there will be time for the Q&A.

With that, I would like to hand over the conference to you, Werner. Please go ahead.

Thanks, Mattias, and good morning. Our progress in Q1 represents a strong start to the year with an improved financial performance and continued commercial momentum. The quarter saw us return to growth with revenue up 5% and EBITA (acq) up 64%, which David will walk through in a more detail shortly.

Hopefully, you've all already seen this morning, we were announced as the winning bidder and signed a contract for the Canadian National Sports Betting Solution, which will see us add another 7 provinces to our recent partnership with Ontario Lottery, giving us a strong position in Canada.

This follows on from our Turnkey Sportsbook partnership with PMU in France, which we signed and launched at the end of the quarter. And we continue to expand our Odds Feed+, signing with ComeOn and deepening our partnership with Hard Rock in the United States.

Thank you, Werner. Good morning, everyone. Let me start with the headline numbers for Q1. So we delivered revenue of EUR 43.5 million, which is up year-on-year versus EUR 41.5 million last year. Operating expenses were EUR 31.9 million, down from EUR 32.6 million in the prior year quarter. That operating discipline translated into a strong step-up in profitability.

Adjusted earnings before interest, tax and amortization on acquisitions or EBITA (acq), as I'll call it, came in at EUR 5.7 million, up from EUR 3.5 million last year, a meaningful improvement in our profit. The important point here is that we're growing the top line while keeping a tight grip on cost. So the incremental revenue is dropping through and increasing our profitability.

One quick technical note, the definition of adjusted EBITA (acq) has been updated to exclude foreign exchange revaluations. So you can think of these numbers as a cleaner view of underlying performance.

Turning to our operator trading dynamics, where we monitor the underlying level of activity in the network on the Turnkey Sportsbook, which is the main revenue driver in the business. The Turnover Index gives you a view of overall betting turnover volumes originally indexed to 100 when we listed. And the orange line shows the aggregate operator trading margin across the network.

The Operator Turnover Index this quarter was 715. As expected and seen each year, due to seasonality of the sporting calendar, this was a slight decrease from Q4 where we had a full quarter of the NFL season. This was partially offset by the launch of our new customer, Ontario Lottery and Gaming.

Versus Q1 last year, Kindred's exits from various markets and the negative impact of a weaker U.S. dollar were offset by organic growth of our operators, particularly in a number of LatAm markets and the launches of a number of new customers, resulting in a 3% year-on-year turnover decrease. The operator trading margin was also much higher this year at 11.6%, which also depressed the level of turnover relative to Q1 last year. We saw particularly strong margins in football and college basketball.

The next slide walks through the year-on-year change in adjusted EBITA (acq). This bridge explains what drove the move from EUR 3.5 million last Q1 to EUR 5.7 million this quarter. At a high level, the biggest driver is the operating leverage with revenue growth flowing through while the cost base stayed controlled.

The first 2 lighter blue columns together comprise the organic growth of the business, split out between the turnover and increased margin, which, as I mentioned, are interdependent. This organic growth is coming particularly from our operators in LatAm as well as the higher operator trading margin, which was even above the full year expectation of 11% we set out last quarter. Our launches comprise a number of new operators across both Turnkey and front-end services, including OLG, as well as new Odds Feed+ customers.

The migrations column includes Kindred exiting the U.K. and Romanian markets last year. The gaming tax and other column includes the year-on-year impact of revised commission rates with certain of our customer contract renewals and additional tax in Colombia where we had 2 different taxes this quarter, impacting January and March, compared to 1 month of tax impact on Q1 2025. There are also other gaming tax increases in jurisdictions such as the Netherlands and Brazil.

Our cost of sales increased as our revenue and number of new customers grew whilst our operating expenses were down as we saw the impact from our savings program with reductions across many of our cost lines. The main FX impact at constant currency was a EUR 0.8 million reduction in the value of revenues mainly from the U.S. due to the weaker dollar versus Q1 last year. All of this resulted in a 64% increase in our adjusted EBITA (acq) to EUR 5.7 million.

I'll finish with the cash flow in the quarter and this slide summarizes the main movements. Looking at 3 things here: the cash generation from operating performance, the working capital effects in the period, and then any investing and financing impacts. So operating profit for the quarter was EUR 4.2 million. Our working capital position improved in the quarter as we caught up on receiving certain large customer payments.

During the quarter, we also set aside EUR 9.4 million in a standby letter of credit contractually required by a new customer. And that's the large orange column you see there; that money is set aside for any contractual requirements during that contract. We also used EUR 4.5 million in the quarter to carry out share buybacks in line with the buyback program announced in November last year, and this will run until the AGM in May. All of this leaves a closing cash balance of EUR 31.5 million at the end of March.

And with that, I hand back to Werner.

Thanks, David. The main highlights here are the signings of PMU and Canadian lotteries, and I'll go in both in more details on subsequent slides shortly. Elsewhere, Q1 saw the launch of OLG, so Ontario Lottery, a significant delivery for us and one which has started very well.

SuomiVeto plans to launch in Finland next year when the newly liberized market goes live in the summer of '27. SuomiVeto is a new sportsbook launched by the same founders of BetCity in the Netherlands.

4 Bears is a tribal-owned retail property in North Dakota, which was signed and launched in Q1. And among 14 launches in the quarter, we highlight here the expansion of LiveScore Group with the launch of its Virgin Bet brand in South Africa as well as the launch of LCKY Group's Vera&John Sportsbook in Sweden. LCKY is the new name of Glitnor Group, which was signed last year.

And since the end of the quarter, we signed also data provision agreement with Google via eSports division, Abios. This will see us provide Google with a range of eSports' data across some of the biggest titles and highlights the capability we have in this area of computer vision, data collection and distribution.

Coming to PMU, a partnership we are very proud of. For those not aware, PMU runs the horse racing monopoly in France and is very much a household name there. However, PMU has struggled to gain much traction in sports betting, partly down to offering an inferior sports betting product so far.

Recently, PMU launched a new app, which for the first time, brings together its racing poker and our sportsbook product. In doing so, it significantly reduces customer friction when cross-selling products, with the journey for racing customers to sportsbook much smoother now.

As part of this agreement, PMU also partnered with us for a bespoke front-end client, enabling PMU to offer experience as true to their brand as possible. Clearly, France is a difficult market, but there should be no doubt that PMU is among those with the most headroom to grow and gain material market share.

This morning, we signed a significant partnership in Canada with Atlantic Lottery Corporation and British Columbia Lottery Corporation to power sportsbooks across 7 provinces in Canada. Following a public tender process, we were selected to provide our online and retail Turnkey Sportsbook as part of a national sports betting solution in Canada.

When taking into account other planned launches across the Kambi network, our footprint in Canada stands to reach 9 out of country's 10 provinces. Coupled with the recent signing of PMU, this underlines our growing reputation among publicly owned and backed organizations, those that place quality and integrity on top of their agenda. More broadly, it's clear we are the #1 choice for operators in regulated markets, which is the result of our long term regulated market strategy.

As I mentioned earlier, our market-leading Odds Feed+ product continues to gain momentum. We believe Odds Feed+ will become the go-to Odds Feed for major operators looking to complement their sportsbook with high-quality odds. And we're already seeing this play out, highlighted by our expansion with Hard Rock in the United States. Our quality of arts has seen Hard Rock gradually expand the range of sports and leagues they take from us, most recently adding college basketball, which included the high-profile March Madness tournament.

And connected to that, it was pleasing to see our quality of service reflected in the recent product comparison carried out by independent research company, Bettormetrics. These research companies studied the first 50 games at March Madness and found our 2 primary partners in the U.S. recorded the best uptime of all major operators in the U.S. So Hard Rock and BetRivers from Rush Street.

This means their odds were available longer, providing their customers with greater opportunities to engage with their product during the games. As well as college basketball, Hard Rock also utilizes Odds Feed+ for a vast array of tennis, all top soccer leagues and a range of outright markets.

In addition, we also signed a new partnership with ComeOn Group and launched our Odds Feed with Coolbet and LeoVegas Group in the quarter. We continue to be confident about the future of Odds Feed.

Q1 contained many significant sporting events for us and our partners around the world. While we saw Q1 turnover fall slightly, as David explained, there were various mitigating factors such as FX and higher sports betting margin. Activity on the Kambi platform actually increased in Q1 year-on-year with us taking approximately 3 million bets more than Q1 '25.

Super Bowl was the headline event of the quarter. However, while it generated the most turnover, it was second to Manchester United versus Real Madrid in the Champions League in terms of bet numbers.

Horse Racing's Premier Champs event of the Year, the Cheltenham Festival, also drove high traffic with the event top of the list in Europe for bet placement. However, it was March Madness, the U.S. college basketball playoff tournament, which took the center stage. While the event ran into Q2, March Madness was the biggest tournament of the year so far for us in terms of turnover and bets placed.

All of these events saw us reaching high levels of load with intense spikes, but we delivered an impeccable service to our partners. And of course, we look forward to similar, if not higher levels, in the weeks and months to come with an eventful summer in terms of the sporting calendar, highlighted, of course, by the FIFA World Cup coming in June.

I'd like to finish on an overview of what we clearly see as our competitive edge. We've spoken many times about our ability to leverage the power of our partner network, but perhaps less so about how this edge is being compounded by our growing AI capability. AI truly comes into its own when it has access to vast data. And Kambi is among the few in this industry that has the quantities required to run AI.

Our scale is global across around 70 partners, featuring operators of all different shapes and sizes, giving us a deep data across all sports. All our valuable data is unique to us, amounting to approximately EUR 17 billion of betting turnover across our network per year with each bet helping form a bigger picture, whether that's the accuracy of odds or player behavioral patterns.

Our betting liquidity is also 98% fully locally regulated, meaning we have it for the long term. This isn't an asset that can be placed under threat as per unregulated business. This big data we have is computed in real time by our proprietary AI trading system, which we have been operating since 2022 and continuously iterating and improving. Clearly, Kambi is a first mover in AI sports betting.

Our AI trading system is currently pricing and trading more than 60% of our bets across the network fully automated. In addition to soccer, we have recently been rolling out AI trading across tennis, ice soccer and basketball with more sports to be added in the coming months.

The end result is a product of greater quality, sharper odds, a wider offering and limitless combinability, all fully automated. And this, in turn, feeds into better financial results, returning a higher sports betting margin, reduced risk and delivered in a more efficient way. As a result, we see greater partner satisfaction with an even stickier product.

And the more partners we have, the more bets we take, the more data we have to continuously train our AI models, the faster we can iterate and improve. We can, of course, see operators and suppliers utilizing AI in many different ways. However, we believe we are ahead of the curve and seeing the benefits already in our performance.

So to summarize, Q1 saw us post an improved financial performance with revenue growth aided by our commercial momentum alongside continued cost discipline, helping to deliver increased profitability. This morning's signing of the Canadian lotteries alongside those of PMU and OLG underscore our reputation among publicly owned and run organizations and highlight the benefits of our regulated market strategy with Kambi undoubtedly the industry's trusted sports betting partner.

And finally, as I explained on the previous slide, we are in a unique position to fully leverage the power of AI to increase our competitive edge. The vast amount of data we have alongside our growing AI capability is creating a new mode for us, one which we are already benefiting from and will increasingly do so in the future.

Thank you, Werner. That concludes the presentation, and I hand over to the operator to take any questions we have from the teleconference.

[Operator Instructions] We will now take the first question from the line of Martin Arnell from DNB Carnegie.

I would like to start with a question on the EBITDA -- adjusted EBITDA guidance. You're repeating the EUR 20 million to EUR 25 million guide. And I think I remember you talked about the effects of Colombia and VAT in the previous report. And now with the situation there, could you just explain a little bit the view here on the range? And you wrote in the report that it's offset by delays to certain customer migrations. Can you explain that a little bit more?

Sure. Yes. So last quarter, we said EUR 20 million to EUR 25 million with likely to be at the top end if there was no reintroduction of a gaming tax in Colombia or an additional gaming tax. That was in February. In March, a new tax was announced in Colombia. That's an additional 16% GGR tax on top of the existing 15% tax they have there. That extra tax for 10 months is an approximate EUR 4 million impact on us.

However, there have been some delays that we talked also about migrations of key customers, particularly Kindred, LeoVegas. These are not timelines we have clear visibility on. Some of those expectations on the timelines, particularly with Kindred, have shifted later than what we originally anticipated. So we don't know exactly when they'll come, but we do know that they'll be later than what we said in February. So that partially offsets that EUR 4 million tax hit from Colombia. So all in all, we think we land firmly in the guidance, yes, with those 2 main points having happened.

Perfect. Thanks you for that answer. And then, I noticed you recently had a short period of downtime on the platform. Can you elaborate what happened and the potential effects that this could have? And how confident do you feel after such an event ahead of the World Cup, for example?

Yes. So Martin, you're right. Unfortunately, our system did suffer a rare technical fault. I'd like to say that in the last 12 months, we had an availability of our system of 99.9%. The incident was not caused by our software. It was an internal network configuration change that disrupted how traffic moved between our data centers. We could identify the incident and the mistake made, quickly resolved the problem, and we also put a permanent fix in place.

So this downtime could eventually impact some of the service level agreements we have in place with customers. But the service level agreements in general are not judged and calculated over a short period of time, but usually on a longer period of time. So the financial impact is unknown for us so far. But we are very confident that any compensation won't materially impact or even let us consider changing our guidance.

The good thing about this incident, if there is anything good in any incident, is that it happened at early morning on a Friday, so let's say, 4, 5 a.m. in the Americas time zone and very early morning in Europe. So this helped a little bit that, of course, the impact for our customers was not very material.

Okay. And your -- what's your expectations and you feel confident ahead of the World Cup in terms of capacity? Because I guess it could be a lot of increase in the activity levels.

Super confident, Martin. This incident had nothing to do with our software, nothing to do with load or spikes or anything. It was simply, I would say, human error of changing network settings in our data center configuration. We had an issue many years ago during Super Bowl. But in the last few years, our system was super stable. During Super Bowl this year, we are not concerned at all about the football World Cup coming. It's the other way around. I think Kambi is known as being one of the most trusted customers being able to handle loads like this.

Perfect. And then I have a question on -- I noticed that the launches with new customers exceeded the migrations in Q1 in the chart that you showed there. Do you expect that to reverse in Q2 with higher migrations? Or what do you expect there?

I mean with the migrations in Q2, I think the extra will let -- will be some more from LeoVegas. So yes, that number will go up. But yes, like I said earlier, the Kindred ones are pushed out. So it shouldn't be such a big impact, we hope, in Q2.

And most of the new ones you launched in Q1, right? And they have a bigger effect in Q2, I guess, on that being up...

Full quarter, full speed, yes.

Full quarter of OLG and full quarter more or less because we launched end of the quarter with PMU as well. So these 2 material new customers will contribute now fully in Q2.

Perfect. And my final question is on AI in the business. Would you say that this -- the AI implementation has already had a big impact on your cost efficiency? And could you repeat how much potential you have left here?

I think it's the wrong view to see the AI capabilities we built only from a cost perspective. Yes, we still have around 300 trailers today. And also in engineering, of course, AI will drive a lot of productivity gains going forward. So there will be a positive cost effect not only for Kambi, for all companies around the globe, I think, who are going full in on AI.

The more important thing for us is, and if you compare our operating margin with the operating margin of many other B2Cs who announced their margin as well publicly, that we already can see how much better the product is we can deliver fully leveraging AI. It's a better AI margin. We leverage all the data we have, all the bet tickets, only we and few others have, more uptime, less suspension times, higher bet acceptance rates. So much more engaging for sports fans that they always can place bets, they can combine whatever they want. So I think the revenue upside having and creating here will create clear moat for us is even more important than, of course, being very disciplined on costs.

We will now take the next question from the line of Nicola Kalanoski from ABG Sundal Collier.

Just a few questions from me. So firstly, on the Canadian lottery deal you've been selected for, would it be fair to say that this is within a similar size range as the Ontario one from a revenue perspective? Or would you characterize this differently?

Both Atlantic Lottery and British Columbia Lottery, so far as I know, Nichola, do not disclose their sports revenues specifically. So I can't comment on the size of this business. Combined, they are a material new customer definitely, but we can't disclose the commercials behind this deal.

Yes. That's fair. And just a final one, and I apologize in advance for this boring question. But on the EUR 9.4 million letter of credit, is this something we should expect to reverse in the future?

No, that will sit there as long as we have the contract with that customer. It was a contractual arrangement. We had to take over from the previous supplier. So we had no kind of choice or bargaining power, but it will sit there for as long as the contract is in place.

Thank you. There are no further questions on the phone at this time. I would like to hand over for any webcast questions.

Apologies, there's one more question on the phone. We will now take the next question from the line of [ Mattias ] from Brummer & Partners.

Just have a question on the announced Canadian contract today. Could you confirm if you are required to set aside cash as a pledge for this contract as well, if it is something of a regional legislative matter in Canada or not? And if we start there, I'm going to ask a few follow-ups, please.

There's no requirements on this deal to set aside any cash or have a letter of credit. So no requirement.

And then this brings me back to -- I mean, looking through the annual report, you also discussed a contractual agreement to acquire source code, which I think you've talked about. Just wondering if you could confirm what the value of that contractual agreement is and when you expect to pay that?

We actually can't say the total amount, but it was kind of low single-digit millions, and there were -- it's 2 phases of payment. One we paid last year, you'd see it in the cash flow statement, it was EUR 1.5 million. And there's a second payment to follow when more testing is completed this year.

And then I just want to touch base on Shape Games and some bookkeeping questions. I think it was 2023, you discussed the contract with Wager or Wagor, how you like to pronounce it, who was subsequently acquired by Yahoo Sports. I think when we look at the Danish filings, it seems like there's been a loan note classified from this license sale that was done to Wager at the time. I mean I'm sure you can clarify this for me, but it seems to me that the payment terms were stretched to 2027 where the first one was due 2025, was EUR 1.5 million in 2025 -- sorry, EUR 2 million in 2025, EUR 1.5 million in 2026, EUR 1.5 million in 2027 according to the Danish filing. It seems -- which was recognized as a loan note.

I was just trying to understand, is this something that was -- first of all, that you have received payment for given that there was a change of control for this entity as it was acquired by Yahoo. But secondly, how is this consolidated in your group accounts, if you don't mind me asking? And also, are -- do your deals and contracts with partners where you sell Shape, to what extent do they include this type of long-dated payment conditions for customers as it seems to be the case here?

Yes. So I mean this was a sale of a source code, which is not our typical transaction with Shape, but we did, in this case, sell a copy to Wager subsequently bought by Yahoo. The payment terms were, as you rightly say, spread over a number of years. So those payment obligations have been taken over by Yahoo and they've paid the first installment I think it was EUR 1.5 million, but it's over EUR 1 million was paid fairly recently. So they're honoring the payment obligations they took over, and we expect to see the rest of the money, I think it was EUR 5 million in total, will be paid in the coming years. It's not a typical Shape transaction, but it's -- it was a one-off sale of a source code.

And then just bookkeeping. You may have announced this, and I apologize, but it seems like if I look at the annual report, did you restate the segment revenue from platform and subscription, right, between -- for 2024? I'm just trying to understand, I haven't been able to find. If you could just explain what happened there on how you classified eSports and platform revenue. Why was it restated? What's the explanation for that?

I'll probably have to look into that and come back to you. I mean, in general, we try and segment that disclosure is based on how we review the business internally. So it will certainly reflect that, but we'll probably have to come back to you what that change was. I don't recall.

Yes. Thank you, Mattias. Did you have -- we need to get through on the other questions as well. So did you have one final question, and we can get back to you on that one you asked.

One final. I just want to clarify. The -- if you look at the cash bridge from Q4 to Q1, I just want to be clear where the outflow payment is embedded in the cash flow statement. Is it in the receivables? Is it right to assume it's in the receivables -- change in receivables?

The letter of credit?

Yes.

Yes. It's shown on the balance sheet is shown in prepayments. So yes, but that's what we split out separately on that graph on the chart just to show the EUR 9.4 million as a stand-alone. On the balance sheet is shown in prepayments.

I would like to hand back over for the webcast questions.

Thank you. So I'll start reading the first question. Werner, you have previously highlighted modernization via Tzeract as a key growth driver. Could you provide an update on the ongoing dialogue with operators who currently manage their own proprietary platforms? Are you seeing a tangible interest in purchasing stand-alone pricing modules as opposed to the full Turnkey Solution during 2026?

I think we made it clear when we announced our changed strategy to not only focus on full Turnkey, but also enter the market of our modularized portfolio. Now that around 30% of the global betting turnover runs today on outsourced, so B2B platforms like our Turnkey Solution, but 70% of the betting market runs on in-house sportsbooks. And we simply wanted to address already 70% of the market with our modular approach. I think with having signed Hard Rock, Kindred, LeoVegas, Super Bet, ComeOn and to only name a few of them, it's clear that this is a success so far. You should expect us also in the future to announce more deals with Tier zero, Tier 1 operators.

It's definitely a trend that even the biggest operators out there do not do all pricing trading in-house anymore, but to outsource slices of their offering to suppliers like us, we think we can offer a premium product, which is very different to what you can buy from others. Odds have a very different level of quality, which also is recognized already by Hard Rock and others. So we are very confident that this premium product we offer to the market will gain even more traction in the future.

Thank you. And then moving over to Wisconsin. When is it reasonable to assume an online launch?

That's a difficult question. With SuomiVeto, we have definitely one of the leading tribes as existing customer in Wisconsin. The governor approved the bill, I think, a few weeks ago. This does not automatically mean that the tribes can start to offer betting tomorrow. It's quite a complicated process that they need local approval, some of them even federal approval to get a permit to offer also sports betting in the state. So it's difficult to say and even the tribes don't know how long it will take. You shouldn't expect really a sports betting launch in Wisconsin in the next few weeks. How long it will take, nobody can answer.

In the Kambi cost, Werner, you talked about strong potential in Brazil going forward for new customers. Which other countries in LatAm have good potential also?

Yes, there's definitely a lot of momentum in Brazil. But with BetWarriors and others, we have a strong footprint also in Argentina. We are quite successful in Brazil, of course, with driving supplying around 70% of the market share in Colombia. We are the clear leader in Colombia with BetPlay and Rush Street. We are live in Puerto Rico, in many more other countries in Latin America. And there is more movement coming on regulation. As you know, we are fully focused on regulated markets. So there is more to come in Latin America.

We still see strong growth results. But of course, in Brazil, everyone knows there will be election on 4th of October. And as always, before elections, there is some political noise. So there are some comments out from the President and others in the country to put more pressure even on the regulated betting operators, which I personally don't think is the right way to canalize business into regulated markets. President Lula said very clearly that he does not want to repeal betting and gaming to be licensed at all. But definitely, there is some pressure on the Brazilian operators right now with more measures to probably come in the next few months.

And then on launches, how has the initial performance been for the new state-owned customers, OLG and PMU?

Both are performing very well. None of them came as a surprise to us, of course. We have been working with both over months now to prepare the best product for them. We can't disclose their numbers. But internally, of course, in all the discussions, we were quite good prepared to launch for them. So both performing very well.

A new product means always that -- especially also for Ontario and PMU with sometimes customer bases being a little bit older than the average that there you see a short-term hit of a few weeks with changing the front end and things like that, but normally this bounces back very quickly. And this is also something we already see in Ontario and PMU. With PMU specifically with a combined app now with horse racing, cross-selling, of course, is so much easier now.

What would a merger between Bally's Intralot and Evoke mean for Kambi?

So I know, and I fully understand that it is an interesting question. I think it's too early to speculate. So far as I know, Belly's is a good customer. We have a great relationship with, haven't even put an offer on the table, I think, right? This will happen in the next few weeks. It could be a risk for us, them owning in the future day-to-day the William Hill Sportsbook. It could be also, of course, an opportunity for us. I think Rob Reeves, the CEO of Belly's talked about cost efficiencies and a lot of things they're looking for, for this deal, but it's definitely too early to speculate.

And then for you, David, maybe. What can you say about the Kindred FDJ migration? They sounded very clear on the call about end '27. Previously, both you and they had said end '26.

Yes, we don't know. I mean that's the truth. We don't know, but we know that there's quite a long notice period they have to give us on any remaining market they want to transition. So that's really what we can work with the time that has still got to go on that notice. So yes, I mean, of course, it would be helpful if any delays help our P&L a lot, but it would just be delaying any headwind when those migrations do come. But we'll watch this space and we'll keep you posted.

Kambi has always stood out with a strict focus on regulated markets and high compliance standards. Given the recent reports about vendor risk and exposure to sanctioned territories as a competitor, how is Kambi's reputation for reliability helping you in discussions with potential partners who are looking for a more secure long-term B2B relationship?

So I think, first of all, it's important to clarify that, of course, if you're a data supplier or if you're a casino slot company, this is a very different business than we have. Especially for our Turnkey business, we can't hide anything. We need to be fully transparent, specifically on also being licensed in Nevada. We need to be super transparent to many regulators where we are active with our software solutions.

It's not always easy to be in the white side of a business with all the tax hits and these other things, but it also provides sustainability for a business in some ways. So clearly, the strategy of Kambi being one of very, very few B2B sports betting operators, while still many are only focused on black/gray markets, our long-term strategy to fully focus on regulated markets, I think it starts to pay off with PMU, with OLG, with now British Columbia and Atlantic Lottery. We would have no chance to win one of these deals, having still a big gray market/market footprint. So this is definitely something which is very important for us going forward that we have done our homework already.

And then the last question, how do you see the development of prediction markets? Threat or opportunity?

Yes. So I don't see this as a big opportunity for us, to be honest. But on the other hand, so far, we have also seen zero impact on our existing business. It's an interesting new type of, I call it still sports betting. I think in the earnings call yesterday, Cesar mentioned that they see an impact on CPA. So because of this crazy spending of the prediction market guys in marketing that the acquisition costs eventually go up a little bit. They also mentioned that they see no impact at all on their revenues or in the states, they are licensed as a betting operator.

Rush Street said tonight, they don't even see the impact on CPAs, on marketing costs and not at all on revenues. It's still very early. An interesting new development for us being regulated in 60-plus jurisdictions and having received very clear statements from some regulators, it's no option at all to engage with these companies. So for us, it's something we monitor from the outside. But definitely it's also a new channel for especially a younger audience to get closer to betting, to engage sports fans. So there is some risk on revenues definitely for some of our customers, but it's also an opportunity, I think, to broaden even the customer base.

Thank you both. That concludes the presentation and the questions. Thank you, everyone, for listening in. We're looking forward to see you again either soon on the road or when we present the Q2 numbers on the 22nd of July. That concludes the presentation for today. Thank you all.

Good morning, everyone, and welcome to Kambi's Q4 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

The agenda for today: We will start with some highlights from our CEO, Werner Becher, followed by a financial summary from our CFO, David Kenyon. Then Werner will come back with some operational highlights and the summary of the quarter. Following the presentation, we will have time for the Q&A.

With that, I would like to hand over the conference to you, Werner. Please go ahead.

Thanks, Mattias. As we look back on 2025, we closed the year on a strong footing. Our adjusted EBITA (acq) for Q4 grew 16%, and that momentum has not slowed as we've entered 2026. Since the start of the year, we've added another 4 partnerships, taking us to 15 since the start of Q4.

We were also pleased to launch with Ontario Lottery in late January, making another major milestone for the business. So we ended the year with strong operational progress across the business, and we've started the new one with the same pace and conviction.

Thank you, Werner, and good morning, everyone. I'll give you a start with the financial summary for the quarter and for the year. So revenue in Q4 was EUR 42.7 million, buoyed by a strong operator trading margin. We saw a significant decrease in costs in the quarter versus last year, and this led to an increase in adjusted EBITA (acq) -- earnings before interest, tax, and amortization on acquisitions -- from EUR 6.3 million to EUR 7.4 million. The cash flow in the quarter was EUR 6 million.

For the full year, revenue this year was EUR 162 million. Last year's number of EUR 176.4 million included EUR 12.5 million transition fees. And excluding these, revenue was down 1.2%. Here, we saw the impact of the Colombia deposit tax, deposit limits in the Dutch market and an increased tax also in that market, plus the migrations of certain Kindred markets away from the Kambi network. And of course, we had a tough comp with the major football tournaments in 2024. This was offset by organic growth in the network, a stronger operator trading margin and launches in 2025 on the network, including in the regulated market of Brazil.

For the full year, our cost decreased as our efficiency programs took effect, and we reduced our variable performance-related costs in the business as well. This enabled us to post an adjusted EBITA (acq) of EUR 17.6 million, down EUR 7.8 million year-on-year despite the EUR 14.4 million revenue decrease linked to those transition fees. The cash flow for the year was EUR 21.2 million. And we carried out buybacks in the year to a value of EUR 25.8 million, utilizing excess cash from transition fees we'd previously received.

Going forward, we expect to align the level of buybacks with the underlying cash generation in the business. So we end the year debt-free with EUR 32.9 million in the bank and significant customer receipts after year-end. So we finished the year with a very healthy balance sheet.

Turning now to the operator trading analysis and aggregated performance of all the operators on the network using our turnkey offering. The orange line shows the operator trading margin across the network, and that was strong this quarter at 11.2% due to operator-friendly results in the NFL and across various European soccer leagues.

For the full year, margin was 10.8%, up from 10% in 2024. This was driven by the trend of increased use of high-margin BetBuilder products. And we're raising our guidance to 11% for the operator trading margin going forward on this basis.

The increase in margin from Q4 last year contributed to the 3% turnover decrease we see on the blue columns, the aggregated operator turnover. In addition to this impact from the higher margin, we saw the impact of the Kindred migration from certain markets and foreign exchange, mainly the U.S. dollar. These headwinds were offset by growth in the network, especially in the newly regulated Brazil market this year versus Q4 last year.

Today, we're setting out guidance for 2026. And our guidance is for adjusted EBITA (acq), excluding FX revaluations of EUR 20 million to EUR 25 million, up from EUR 17.6 million in 2025. We expect to be towards the upper end of this range if there's no introduction of a new sports betting tax in Colombia.

Here, we set out the transition from '25 to '26. The first column here is the organic growth in the business. This is broadly driven from the additional revenue from our Odds Feed+ customers and others in the network on the turnkey offering. 2026 launch column includes revenues, both from signed but not yet launched at the start of the year customers and expected signings we expect to make this year. And the largest part of the -- of this column is from the recently launched OLG contract.

The third blue column there is the 2026 World Cup, and Werner will talk more about the World Cup. We're really looking forward to it. With this extended format, we estimate this to be a EUR 5 million revenue opportunity this year. The orange columns are the headwinds we're facing. So firstly, the migrations. This largely represents Kindred and LeoVegas. We don't know yet the exact time lines of some of these migrations, so the numbers represent our best estimates.

As previously discussed, the Kindred turnkey contract will be fully out by the end of this year. So the year-on-year headwind will last into 2027, and then it will disappear as they transition solely onto our Odds Feed+ service.

The gaming tax and other column includes the impact on commission rates of certain key partner renewals, as well as increases in gaming taxes, for example, in the Dutch, Brazilian, and Illinois markets, as well as other U.S. states, which we know about today. Additionally, there is the indirect impact of the remote gaming duty increase in the U.K., which will impact the level of marketing expected from certain U.K. operators we work with.

On the cost side, firstly, cost of sales will increase this year as we see an increase in recharged data supplier and other supply costs, which are charged through to customers. Our operating expenses, on the other hand, will be broadly flat, with inflationary effects driving salary and supplier cost increases. But these will be offset by our ongoing efficiency programs as we look to rationalize costs across the business. And this year, we're targeting an annual cash impact of our savings of around EUR 9 million.

Any one-off costs associated with these savings programs will be presented this year as in 2025, as items affecting comparability. So assuming no introduction of a new Colombia sports betting tax, this broadly flat cost outlook should enable us to reach the upper part of the EUR 20 million to EUR 25 million range you see on the screen.

With that, I'm going to hand you back to Werner.

Thanks, David. As I mentioned earlier, we are in a strong period of new business wins, and you can see our latest turnkey additions on this slide. For Q4, I covered all but one in the last presentation, so I want to focus here on the most recent Pickwin.

Pickwin is a Mexico-facing operator that switched to Kambi from another supplier, choosing us to support their growth in a highly competitive market. They're already live on our sportsbook, and I'm excited to see how this scale over the coming years, especially with the fantastic opportunity ahead as Mexico co-hosts the FIFA World Cup.

In Q4, we also signed 4 partner extensions, including Paf and our retail partnership with PENN Entertainment. And in December, we launched with PENN into the recently regulated State of Missouri.

Q1 has started already strong with 3 new partners added so far. In recent days, we signed an agreement with 4 Bears, a tribal-owned operator in North Dakota, which will become a new U.S. state for Kambi.

We also partnered with SuomiVeto, a new operator founded by the same team behind BetCity, one of our most successful partners in the Netherlands, now owned by Entain. SuomiVeto will be aimed at the Finnish market, where the founders hope to replicate their success upon launch of the country's regulated market in '27. And in January, we completed the innovation process with Ontario Lottery and Gaming Corporation, formally bringing OLG from FDJ into full partnership with the Kambi contract.

On 27th of January, we transitioned this full contract with OLG, taking on responsibility for the sportsbook operating through 2032. We launched with OLG and its PROLINE brand both online and across 10,000 retail locations, a major undertaking and a fantastic achievement by everyone involved.

As part of this partnership, we are also providing the front-end client, giving OLG customers across the province a faster, cleaner, and more engaging user experience. This launch strengthens our position within the lottery sector and among other state-owned organizations looking to upgrade their sports betting offering. But now our focus is firmly on working hand-in-hand with OLG and supporting them as they grow their sportsbook business.

Our Odds Feed+ product continues to gain meaningful traction in the market. Since our last report, where we announced Superbet and Coolbet, we've added FDJ UNITED, and more recently ComeOn, to the growing list of Odds Feed+ partners. This builds on earlier wins with LeoVegas and Hard Rock, and shows how the product is resonating with Tier 1 operators.

I've said it before, and I say it again, we have a real edge here. Just like with our turnkey offering, our vast global liquidity is a powerful advantage, driving the accuracy and performance of our AI-powered pricing and trading. Yes, there are established incumbents in the Odds Feed space. But over time, I'm confident we can grow our share to become a material and meaningful contributor to our business.

On this side, you can clearly see the impact of our commercial strategy. A key priority has been to reduce our reliance on a small number of large turnkey partners and to diversify our revenue base, lowering our overall risk, and this strategy is working.

The share of revenue generated by our 3 largest partners has fallen again, now down to 36%, driven both by the addition of new partners and the continued growth of those outside the top 3. By year-end, we generated revenue from 53 turnkey partners, along with 7 Odds Feed partners, with this number rising this year again. These partners are all spread far and wide across the world, providing us with greater geographic diversification, which also supports more stable sports betting margin.

On this slide, I want to show you just how quickly AI is transforming our business. This chart shows the surge in bets priced and traded by our automated AI-driven systems. Last year, 49% of all bets across the Kambi network were fully AI traded. And in January, we passed the 50% tipping point, meaning the majority of bets placed are on the bet offers priced through our AI models.

Next year, I look forward to showing you the same chart, again, expanded to include even more sports, soccer, tennis, basketball, ice hockey and others, as AI continues to scale across our product. And the benefit isn't just automation and efficiency, even more important is the quality of the product, our premium product.

Our proprietary neural network delivers sharper prices, faster decisions and a more constant trading performance. So as you can see, for us, AI isn't a buzzword. It's a capability already deeply embedded into our product, our workflows and increasingly also our results.

We are now less than 4 months away from what will be the biggest sports betting event of the year and arguably the biggest of all time. The FIFA World Cup '26 kicks off June 11, and this addition will be larger than anything we've seen before. Not only will be there 60% more games and double the knockout matches, but thanks to our global footprint, we expect engagement across the Kambi network to reach unprecedented levels.

Just looking at the 3 host nations, Canada, Mexico, and the United States, Kambi has partners in all of them where interest will naturally be sky high. And when we zoom out further, 8 of our top 10 betting volume markets have already qualified for the tournament with Sweden and Denmark still fighting for their place in the playoffs.

This World Cup represents a huge opportunity for our partners to reactivate existing customers and to acquire new ones. And their success will depend heavily on an offering of a world-class product. And while we never rest on our laurels, we have a product that competes at the highest level. In recent months, our soccer product has improved further, driven by AI trading, including more player props, broader depth, and virtual limitless combinability. And as I mentioned earlier, we expect to push this even further.

We look ahead to this World Cup with real confidence because for the first time, an entire World Cup will be completely traded on AI across our network.

So to sum up, we finished the year in strong fashion, taking that momentum into '26 with further partner signings and the important launch of OLG. Today, we released our guidance for '26, which highlights a return to revenue growth and increased profitability despite various headwinds. And as we continue to build the foundations for long-term success through product, through operational excellence and through our partner network expansion, we believe we will accelerate growth in the years ahead. Thank you.

Thank you, Werner. With that, I will hand over the word to the operator and see if we have any questions on the teleconference.

[Operator Instructions] The first question comes from the line of Martin Arnell from DNB Carnegie.

My first question is on the guidance for 2026. Can you elaborate a little bit on the moving parts here in addition to the intro of sports betting tax in Colombia or the potential intro, and the other sort of key factors when it comes to the organic growth item, for example?

Yes. I mean on organic growth specifically, I think the biggest -- I mean, across various operators, I won't get into them one by one. But I think I'd call out specifically the Odds Feed+ customers where we've had a -- we started in 2025, and it's -- yes, it's been a good start, but I think we've got much more potential. And I think that is particularly one revenue line that will grow materially in '26. So we're looking forward to seeing how that develops.

In this bridge, what is the organic growth in percent on your business in this? What does the bar in organic growth represent in terms of organic growth?

Can you go to the slide?

Good, take the slide.

Yes. I mean, it's kind of mid-single-digit percentage, I would say.

Mid-single-digit percent roughly. Yes, okay.

Roughly kind of 3% to 5%, I guess.

Just a question on the cash flow also on your -- you had a negative change from working capital changes. Can you elaborate on that? Is it something that has reversed already in Q1? Or what is it?

Yes. No, I was pleased to say, we had some large customer receipts coming in just after year-end. So actually, the EUR 32 million -- EUR 32.9 million we talked about at year-end actually is kind of north of EUR 40 million as we stand here today. So yes, there were some receipts that came in just after year-end. So its -- yes.

Okay. And this -- the effect from the Football World Cup going forward, how well prepared would you say that you are? How much of a bigger event will this be for you? I appreciate the guide that you gave of around EUR 5 million effect. And how does that compare to historic performance of these kind of events?

Yes. Martin, we are, of course, very excited about the FIFA World Cup coming up because -- especially comparing it to last year, where we had a very dry summer with not a lot of big sporting events. This year will be an exciting event for sports fans across the globe. As you mentioned, we expect to generate around EUR 5 million of revenues, so roughly 3% added revenue to our top line out of it.

Looking back historically, of course, World Cups were even more important 10, 15 years ago, where sports fans had not the chance to bet on 700,000 live events per year, but only, I don't know, 20, 30, 50. This number was increasing heavily over the last few years.

So it's still super important for the betting industry, especially with our global footprint in South America, in Europe, but also now with Mexico, Canada, and the U.S. hosting this event. So it will be a material and very important event. But of course, each and any single event, the importance of these events is decreasing as we add more and more events in general to our schedule.

David, do you remember how much you had last time around in the World Cup in terms of contribution on adjusted EBITDA?

I don't, but I think we're forecasting a little higher than we had in the past really because it's an expanded event. So -- and yes, more matches this year. So yes, I think it's a little higher versus historically.

My final question is on the AI effect on the business. And I appreciate that you're working hard with this. And -- but there's also a question on sort of what our competitors doing and how easy would it be to replicate? And then also the discussion around prediction markets, would be interesting to hear your latest views on it, if you have changed anything in terms of views.

Yes. Thanks for the question, Martin. I'll start with AI. So we don't see AI in general as a threat for us as a company. It's exactly the opposite. We're an early mover here. We started to invest already some years ago, and we are also already now seeing the results out of it.

Some of our competitors are going in another direction than we are going. They are -- they have, I would say, given up on pricing and trading and they simply purchase Odds Feed from other suppliers. We see pricing trading as the core of our business, and we want to be excellent, and we want to offer a premium sportsbook. So I think it will not be easy to replicate our systems, the domain knowledge we have, but especially the big liquidity we have.

We have a betting liquidity of around EUR 17 billion from our 60-plus customers on our neural network. It's about 1.6 billion bet tickets coming into our system on an annual base. And this is something you can't replicate. The data we have, the historical data, first of all, but also the real-time bet tickets coming in and this big liquidity is super important for neural networks and to train AI and to sharpen your prices, this is very difficult to replicate.

Coming to your second question to prediction markets, we still haven't seen any impact on our business from prediction markets. Of course, we fully understand that in unregulated markets in the U.S. specifically, these guys have some first-mover advantage and they will take some market share there, which is some threat for, I think, the regulated industry of betting. But in the regulated states, their impact so far was not material at all as the product is very simple.

We see it positive and negative. We see this very simple product prediction markets offer also as an opportunity to educate sport fans and to bring them to sports betting. So we don't only see this as a negative. But of course, the future will show how it turns out.

We will take our next question. Your question comes from Nicolas Kalanoski from ABG Sundal Collier.

Just a few questions from my end. So you've had a quite decent momentum in terms of signings, I think it's fair to say. I'm a little curious, has the feedback from prospective clients changed compared to, let's say, a year ago, if you look at the roster of prospects alone?

Yes, the market, of course, is in an evolving phase at the moment. I think we are still in a gold rush in South America, I would call it. So a lot of opportunities, a lot of regulation going there on country by country. We also still see big movements in the U.S. And of course, we have a lot of expectations, as Martin mentioned in his question before, specifically about prediction markets that this could even speed up the regulation in some U.S. states.

In Europe, market is already very, very mature. So there is not a lot of business additionally we can gain. We can take some business away from other suppliers, but there's not a lot of growth in Europe anymore.

On top of our turnkey business, of course, our new Odds Feed product is something which we're very focused on. And there, of course, the opinion about what Kambi is, I think, has changed in the market now. So we have a lot of, I would say, advanced discussions with big Tier 1 operators being very interested in this product. So this is a very exciting opportunity for us.

Yes. Very cool. I appreciate that. And I also appreciate your prior commentary on the impact of AI and how you view the business as being insulated partly against it.

Just a final one on the cost base. When I look at the guidance bridge, I take the building blocks of the guidance to mean you're relatively satisfied with your current cost base. Is there any chance that we can see changes in the OpEx base maybe turning into a tailwind for the profitability?

I wouldn't say we're satisfied. And I think I mentioned, I called out extensive savings programs. There are inflationary effects in the business for sure, and you see that in pay rises and supplier costs rising. So we need to battle against those. And I talked around the EUR 9 million annual cash savings programs. It's across all parts of the business.

We're looking at office sizes, renegotiating suppliers, how we structure ourselves, leveraging AI across trading, across the whole business. So we're doing -- we're working really hard on the cost base. And it's hard against that inflationary backdrop, but we are -- yes, we're trying to keep it as flat as possible.

There are no further phone questions. If you wish to take the written webcast questions...

Thank you. So we had quite a few written questions. So we'll start with the Odds Feed one. You just signed ComeOn on Odds Feed+ and stated you are getting good traction with Tier 1s despite established incumbents. Can you just expand on the difference between the Kambi Odds Feed and those supplied by others as well as future prospects?

Yes. Happy to take this question. So we're clearly a challenger in the Odds Feed market. We have been known for many years as being a full turnkey supplier. So I think the industry received the message now that there is something interesting also on the Odds Feed side, they can buy from Kambi now, and we see some good tractions with first Tier 1 customers having signed up.

The big difference and the edge we have on Odds Feed+ is clearly that most of the other Odds Feed, you can buy, they do pricing only on in-event data. So only on what's happening in the game. Our Odds Feed is traded, which means we fully leverage the 1.6 billion bet tickets we get into our system, and we trade the odds, meaning our odds are changing faster, more accurate, leading to a much better product for sports fans out there.

We don't suspend markets that long than others. Our bet acceptance rate is higher. Our availability is higher. Our margin is higher. The experience for sports fans is so much better taking our sportsbook, and the margin is so much better for operators taking a much sharper pricing.

Thank you. Next one, coming back a bit to the prediction markets. With the rapid rise of CFTC regulated prediction markets in the U.S., could there be an opportunity to license your Tzeract AI pricing technology, especially to financial market makers or trading firms operating in these markets?

If you ask the question, if we could, then the answer is yes. If we will do that, the answer is at least for the short-term, no, because we are licensed in many jurisdictions in the U.S. So we play on the white side of the business, and that's also something we will do in the future.

There is a high risk, and we received a lot of very clear statements from regulators across the U.S. that if we would go into this space that the risk of losing some license and therefore, also customers relying fully on us would be very high. So we could be market maker.

I don't think that Tzeract specifically would be the only edge we have here, but it's not on our agenda for the next few months. We will continuously monitor the space and especially the court cases and the decisions coming up here in the next few years. But for now, our strategy is clear: To stay fully focused on sports betting.

Yes. And the question was a bit also on financial markets outside of sports betting, but I guess the answer there is no as well. We're not really looking at that.

No. We're laser-focused on our strategy to offer the best available premium sportsbook. And there are always opportunities you could go left and right. But for us, it's super important to stay fully focused on our strategy.

Clear. Coming to Colombia. Colombia saw strong customer GGR growth in 2025, with VAT currently removed. How is Colombia reflected in your 2026 growth assumptions?

Yes. So I mean, there is a tailwind. If there's no tax introduced, there's around EUR 3.6 million tailwind versus last year. Of course, there may be a tax introduced, so that's why we say, we're aiming for the top end of the range given today, if there's no tax, but we're conscious that can change. We hope it's at a sensible level going forward. That's what we can really ask for at this stage.

How much on the assumptions is incorporated in sort of organic growth or...?

Yes, I can answer this question. So of course, the introduction of this new tax at the end of the first quarter last year disrupted a little bit the market because on these high tax, it's simply not possible to run a profitable business.

So our customers in this market try to offset the impact with a lot of more bonus money they gave to customers to keep their market share. Now the market changed only, I think, 3 weeks ago when this new tax was suspended. We see already now that customers in Colombia are changing their marketing strategy, their bonus and engagement strategy.

I think it's too early to say how this will change also market growth for our customers. But of course, we expect some very nice tailwind from this market. Difficult to say how big the organic growth because of these changed marketing strategies will be.

Then coming back to the 2026 launches. Does the contribution include any unsigned customers or only contracts already secured?

Both. It covers both. But I think that hopefully, the reassuring part, as I mentioned earlier, is that the Ontario Lottery and Gaming piece, which is obviously signed and launched is a massive part of that chart -- over half of that chart is from that one contract alone. And then we have some other signings recently announced, which are also in there. And then there is some expectation and hope of further signings contributing there.

Yes. Okay. And coming back to the Odds Feed, what share of 2026 revenue do you expect to come from modular products? I guess it's Abios and Shape as well, but also the Odds Feed.

Yes. I mean it's growing. I'd say, it's probably hopefully, it should be north of 10% this year in the 10% to 15% range, I think.

Yes. Okay. Following the Pickwin agreement, are you still equally positive on Latin America?

Yes, of course, we are. Many customers in the Brazilian market, of course, have signed up with suppliers when the market opened early 2025. So the next window of opportunity for us is coming right now where some of these contracts will come to an end eventually -- 2, 3 years contract. So we already have some inbound questions from operators in Brazil being not super happy with their existing suppliers, not only because of pricing and trading, but also mainly because of being not fully compliant with regulations.

This is actually one of our big, big strengths: Being licensed in more than 60 jurisdictions around the globe that customers can be 100% sure that they are fully compliant and there is no risk to lose a license. So also for the next, I would say, 18, 24 months, Latin America will be a key focus for our sales ambitions, yes.

Then moving to another area of growth. Could you provide an update on the Nevada licensing process for OMEGA and when we might expect customer launches there?

Yes. So we are fully licensed in Nevada. Next step is to go with our first customer in Nevada through what's called there the field test. We are in advanced discussion with several interested partners in the State of Nevada as we speak. And we are still very confident that we will be able to launch 1, 2 or 3 of them during the time of the year and go with one or more of them in this field test approach, which is already a production test then. So we would be already live then.

Thank you. Operators are optimistic that Alberta could go live at the end of Q2. Is this reflected in guidance either from existing operators or potential contract wins?

Alberta, I don't know specifically.

Yes. So of course, we have modeled into our 2026 budget movements up and down. Alberta will come most probably now soon as a new state, but there are also a lot of other, I would say, downsides and taxes we don't know to be announced and introduced today. So we don't expect Alberta to have a very material impact on our budget for '26. Of course, we appreciate each and any new state in the U.S. to regulate sports betting and to make it legal and to close down the black markets.

Okay. And then continuing on the taxes. The U.K. tax increase is for 2027. It feels a bit early to bring it up as a headwind for 2026. Are you that close to clients that they've already told you about the marketing budget for 2027? So maybe explain a little bit what is the...

Here, we're talking about -- I referenced earlier the remote gaming duty, and that's more on casino products, for example. Sports betting increase does come in '27, but there is a 2026 -- April '26 that remote gaming duty goes up from 21% to 40% and will severely impact U.K. operators.

There's been a huge talk in the U.K. around this. So it's very clear that that will, I'm sure, limit what they can spend on marketing and their resources generally. So that's the indirect impact that we will -- that we have included this year on us, which is what we see.

Yes. And then the 3% to 5% revenue growth, is that organic revenue growth, excluding FX? I guess, FX will be a negative given USD weakness.

Yes. There will be a small headwind on a full year basis. But yes, the 3% to 5% is excluding that.

How have rising taxes across your key markets affected your full year 2025 EBITDA?

Negatively. Always taxes -- I hate just talking about taxes. I much prefer talking about bonus opportunities. But yes, there's a long list of taxes that have hurt us in '25. You've seen it. It's something we expect. We do, of course, forecast for all these budget taxes going up, but I mean, it does hurt us. I'm not going to call out individual impacts, a long list of them.

Okay. And actually, the last question is on cash flow. Development cost of intangible assets decreased from EUR 28.2 million to EUR 26.3 million in 2025. What should we expect here for 2026?

Relatively flat, I would say. I mean, I've talked around some of the areas we are looking to rationalize our costs. But I think generally, it won't be in that area. So I wouldn't really especially see a massive change in the amount we're capitalizing going forward. Things can change. But as we stand here today, that's -- it seems a relatively stable number, I think, in our P&L and balance sheet.

Okay. Thank you. Thank you, everyone, for listening in today, and we look forward to speaking to you soon or again after the Q1 presentation.

That concludes the presentation for today. Thank you, David and Werner as well. Thank you.

Thank you, Mattias.

MDA/>

[Audio Gap]

Thanks, Mattias. As we look back on 2025, we closed the year on a strong footing. Our adjusted EBITA (acq) for Q4 grew 16%, and that momentum has not slowed as we've entered 2026. Since the start of the year, we've added another 4 partnerships, taking us to 15 since the start of Q4.

We were also pleased to launch with Ontario Lottery in late January, making another major milestone for the business. So we ended the year with strong operational progress across the business, and we've started the new one with the same pace and conviction.

Thank you, Werner, and good morning, everyone. I'll give you a start with the financial summary for the quarter and for the year. So revenue in Q4 was EUR 42.7 million, buoyed by a strong operator trading margin. We saw a significant decrease in costs in the quarter versus last year, and this led to an increase in adjusted EBITA (acq) -- earnings before interest, tax, and amortization on acquisitions -- from EUR 6.3 million to EUR 7.4 million. The cash flow in the quarter was EUR 6 million.

For the full year, revenue this year was EUR 162 million. Last year's number of EUR 176.4 million included EUR 12.5 million transition fees. And excluding these, revenue was down 1.2%. Here, we saw the impact of the Colombia deposit tax, deposit limits in the Dutch market and an increased tax also in that market, plus the migrations of certain Kindred markets away from the Kambi network. And of course, we had a tough comp with the major football tournaments in 2024. This was offset by organic growth in the network, a stronger operator trading margin and launches in 2025 on the network, including in the regulated market of Brazil.

For the full year, our cost decreased as our efficiency programs took effect, and we reduced our variable performance-related costs in the business as well. This enabled us to post an adjusted EBITA (acq) of EUR 17.6 million, down EUR 7.8 million year-on-year despite the EUR 14.4 million revenue decrease linked to those transition fees. The cash flow for the year was EUR 21.2 million. And we carried out buybacks in the year to a value of EUR 25.8 million, utilizing excess cash from transition fees we'd previously received.

Going forward, we expect to align the level of buybacks with the underlying cash generation in the business. So we end the year debt-free with EUR 32.9 million in the bank and significant customer receipts after year-end. So we finished the year with a very healthy balance sheet.

Turning now to the operator trading analysis and aggregated performance of all the operators on the network using our turnkey offering. The orange line shows the operator trading margin across the network, and that was strong this quarter at 11.2% due to operator-friendly results in the NFL and across various European soccer leagues.

For the full year, margin was 10.8%, up from 10% in 2024. This was driven by the trend of increased use of high-margin BetBuilder products. And we're raising our guidance to 11% for the operator trading margin going forward on this basis.

The increase in margin from Q4 last year contributed to the 3% turnover decrease we see on the blue columns, the aggregated operator turnover. In addition to this impact from the higher margin, we saw the impact of the Kindred migration from certain markets and foreign exchange, mainly the U.S. dollar. These headwinds were offset by growth in the network, especially in the newly regulated Brazil market this year versus Q4 last year.

Today, we're setting out guidance for 2026. And our guidance is for adjusted EBITA (acq), excluding FX revaluations of EUR 20 million to EUR 25 million, up from EUR 17.6 million in 2025. We expect to be towards the upper end of this range if there's no introduction of a new sports betting tax in Colombia.

Here, we set out the transition from '25 to '26. The first column here is the organic growth in the business. This is broadly driven from the additional revenue from our Odds Feed+ customers and others in the network on the turnkey offering. 2026 launch column includes revenues, both from signed but not yet launched at the start of the year customers and expected signings we expect to make this year. And the largest part of the -- of this column is from the recently launched OLG contract.

The third blue column there is the 2026 World Cup, and Werner will talk more about the World Cup. We're really looking forward to it. With this extended format, we estimate this to be a EUR 5 million revenue opportunity this year. The orange columns are the headwinds we're facing. So firstly, the migrations. This largely represents Kindred and LeoVegas. We don't know yet the exact time lines of some of these migrations, so the numbers represent our best estimates.

As previously discussed, the Kindred turnkey contract will be fully out by the end of this year. So the year-on-year headwind will last into 2027, and then it will disappear as they transition solely onto our Odds Feed+ service.

The gaming tax and other column includes the impact on commission rates of certain key partner renewals, as well as increases in gaming taxes, for example, in the Dutch, Brazilian, and Illinois markets, as well as other U.S. states, which we know about today. Additionally, there is the indirect impact of the remote gaming duty increase in the U.K., which will impact the level of marketing expected from certain U.K. operators we work with.

On the cost side, firstly, cost of sales will increase this year as we see an increase in recharged data supplier and other supply costs, which are charged through to customers. Our operating expenses, on the other hand, will be broadly flat, with inflationary effects driving salary and supplier cost increases. But these will be offset by our ongoing efficiency programs as we look to rationalize costs across the business. And this year, we're targeting an annual cash impact of our savings of around EUR 9 million.

Any one-off costs associated with these savings programs will be presented this year as in 2025, as items affecting comparability. So assuming no introduction of a new Colombia sports betting tax, this broadly flat cost outlook should enable us to reach the upper part of the EUR 20 million to EUR 25 million range you see on the screen.

With that, I'm going to hand you back to Werner.

Thanks, David. As I mentioned earlier, we are in a strong period of new business wins, and you can see our latest turnkey additions on this slide. For Q4, I covered all but one in the last presentation, so I want to focus here on the most recent Pickwin.

Pickwin is a Mexico-facing operator that switched to Kambi from another supplier, choosing us to support their growth in a highly competitive market. They're already live on our sportsbook, and I'm excited to see how this scale over the coming years, especially with the fantastic opportunity ahead as Mexico co-hosts the FIFA World Cup.

In Q4, we also signed 4 partner extensions, including Paf and our retail partnership with PENN Entertainment. And in December, we launched with PENN into the recently regulated State of Missouri.

Q1 has started already strong with 3 new partners added so far. In recent days, we signed an agreement with 4 Bears, a tribal-owned operator in North Dakota, which will become a new U.S. state for Kambi.

We also partnered with SuomiVeto, a new operator founded by the same team behind BetCity, one of our most successful partners in the Netherlands, now owned by Entain. SuomiVeto will be aimed at the Finnish market, where the founders hope to replicate their success upon launch of the country's regulated market in '27. And in January, we completed the innovation process with Ontario Lottery and Gaming Corporation, formally bringing OLG from FDJ into full partnership with the Kambi contract.

On 27th of January, we transitioned this full contract with OLG, taking on responsibility for the sportsbook operating through 2032. We launched with OLG and its PROLINE brand both online and across 10,000 retail locations, a major undertaking and a fantastic achievement by everyone involved.

As part of this partnership, we are also providing the front-end client, giving OLG customers across the province a faster, cleaner, and more engaging user experience. This launch strengthens our position within the lottery sector and among other state-owned organizations looking to upgrade their sports betting offering. But now our focus is firmly on working hand-in-hand with OLG and supporting them as they grow their sportsbook business.

Our Odds Feed+ product continues to gain meaningful traction in the market. Since our last report, where we announced Superbet and Coolbet, we've added FDJ UNITED, and more recently ComeOn, to the growing list of Odds Feed+ partners. This builds on earlier wins with LeoVegas and Hard Rock, and shows how the product is resonating with Tier 1 operators.

I've said it before, and I say it again, we have a real edge here. Just like with our turnkey offering, our vast global liquidity is a powerful advantage, driving the accuracy and performance of our AI-powered pricing and trading. Yes, there are established incumbents in the Odds Feed space. But over time, I'm confident we can grow our share to become a material and meaningful contributor to our business.

On this side, you can clearly see the impact of our commercial strategy. A key priority has been to reduce our reliance on a small number of large turnkey partners and to diversify our revenue base, lowering our overall risk, and this strategy is working.

The share of revenue generated by our 3 largest partners has fallen again, now down to 36%, driven both by the addition of new partners and the continued growth of those outside the top 3. By year-end, we generated revenue from 53 turnkey partners, along with 7 Odds Feed partners, with this number rising this year again. These partners are all spread far and wide across the world, providing us with greater geographic diversification, which also supports more stable sports betting margin.

On this slide, I want to show you just how quickly AI is transforming our business. This chart shows the surge in bets priced and traded by our automated AI-driven systems. Last year, 49% of all bets across the Kambi network were fully AI traded. And in January, we passed the 50% tipping point, meaning the majority of bets placed are on the bet offers priced through our AI models.

Next year, I look forward to showing you the same chart, again, expanded to include even more sports, soccer, tennis, basketball, ice hockey and others, as AI continues to scale across our product. And the benefit isn't just automation and efficiency, even more important is the quality of the product, our premium product.

Our proprietary neural network delivers sharper prices, faster decisions and a more constant trading performance. So as you can see, for us, AI isn't a buzzword. It's a capability already deeply embedded into our product, our workflows and increasingly also our results.

We are now less than 4 months away from what will be the biggest sports betting event of the year and arguably the biggest of all time. The FIFA World Cup '26 kicks off June 11, and this addition will be larger than anything we've seen before. Not only will be there 60% more games and double the knockout matches, but thanks to our global footprint, we expect engagement across the Kambi network to reach unprecedented levels.

Just looking at the 3 host nations, Canada, Mexico, and the United States, Kambi has partners in all of them where interest will naturally be sky high. And when we zoom out further, 8 of our top 10 betting volume markets have already qualified for the tournament with Sweden and Denmark still fighting for their place in the playoffs.

This World Cup represents a huge opportunity for our partners to reactivate existing customers and to acquire new ones. And their success will depend heavily on an offering of a world-class product. And while we never rest on our laurels, we have a product that competes at the highest level. In recent months, our soccer product has improved further, driven by AI trading, including more player props, broader depth, and virtual limitless combinability. And as I mentioned earlier, we expect to push this even further.

We look ahead to this World Cup with real confidence because for the first time, an entire World Cup will be completely traded on AI across our network.

So to sum up, we finished the year in strong fashion, taking that momentum into '26 with further partner signings and the important launch of OLG. Today, we released our guidance for '26, which highlights a return to revenue growth and increased profitability despite various headwinds. And as we continue to build the foundations for long-term success through product, through operational excellence and through our partner network expansion, we believe we will accelerate growth in the years ahead. Thank you.

Thank you, Werner. With that, I will hand over the word to the operator and see if we have any questions on the teleconference.

[Operator Instructions] The first question comes from the line of Martin Arnell from DNB Carnegie.

My first question is on the guidance for 2026. Can you elaborate a little bit on the moving parts here in addition to the intro of sports betting tax in Colombia or the potential intro, and the other sort of key factors when it comes to the organic growth item, for example?

Yes. I mean on organic growth specifically, I think the biggest -- I mean, across various operators, I won't get into them one by one. But I think I'd call out specifically the Odds Feed+ customers where we've had a -- we started in 2025, and it's -- yes, it's been a good start, but I think we've got much more potential. And I think that is particularly one revenue line that will grow materially in '26. So we're looking forward to seeing how that develops.

In this bridge, what is the organic growth in percent on your business in this? What does the bar in organic growth represent in terms of organic growth?

Can you go to the slide?

Good, take the slide.

Yes. I mean, it's kind of mid-single-digit percentage, I would say.

Mid-single-digit percent roughly. Yes, okay.

Roughly kind of 3% to 5%, I guess.

Just a question on the cash flow also on your -- you had a negative change from working capital changes. Can you elaborate on that? Is it something that has reversed already in Q1? Or what is it?

Yes. No, I was pleased to say, we had some large customer receipts coming in just after year-end. So actually, the EUR 32 million -- EUR 32.9 million we talked about at year-end actually is kind of north of EUR 40 million as we stand here today. So yes, there were some receipts that came in just after year-end. So its -- yes.

Okay. And this -- the effect from the Football World Cup going forward, how well prepared would you say that you are? How much of a bigger event will this be for you? I appreciate the guide that you gave of around EUR 5 million effect. And how does that compare to historic performance of these kind of events?

Yes. Martin, we are, of course, very excited about the FIFA World Cup coming up because -- especially comparing it to last year, where we had a very dry summer with not a lot of big sporting events. This year will be an exciting event for sports fans across the globe. As you mentioned, we expect to generate around EUR 5 million of revenues, so roughly 3% added revenue to our top line out of it.

Looking back historically, of course, World Cups were even more important 10, 15 years ago, where sports fans had not the chance to bet on 700,000 live events per year, but only, I don't know, 20, 30, 50. This number was increasing heavily over the last few years.

So it's still super important for the betting industry, especially with our global footprint in South America, in Europe, but also now with Mexico, Canada, and the U.S. hosting this event. So it will be a material and very important event. But of course, each and any single event, the importance of these events is decreasing as we add more and more events in general to our schedule.

David, do you remember how much you had last time around in the World Cup in terms of contribution on adjusted EBITDA?

I don't, but I think we're forecasting a little higher than we had in the past really because it's an expanded event. So -- and yes, more matches this year. So yes, I think it's a little higher versus historically.

My final question is on the AI effect on the business. And I appreciate that you're working hard with this. And -- but there's also a question on sort of what our competitors doing and how easy would it be to replicate? And then also the discussion around prediction markets, would be interesting to hear your latest views on it, if you have changed anything in terms of views.

Yes. Thanks for the question, Martin. I'll start with AI. So we don't see AI in general as a threat for us as a company. It's exactly the opposite. We're an early mover here. We started to invest already some years ago, and we are also already now seeing the results out of it.

Some of our competitors are going in another direction than we are going. They are -- they have, I would say, given up on pricing and trading and they simply purchase Odds Feed from other suppliers. We see pricing trading as the core of our business, and we want to be excellent, and we want to offer a premium sportsbook. So I think it will not be easy to replicate our systems, the domain knowledge we have, but especially the big liquidity we have.

We have a betting liquidity of around EUR 17 billion from our 60-plus customers on our neural network. It's about 1.6 billion bet tickets coming into our system on an annual base. And this is something you can't replicate. The data we have, the historical data, first of all, but also the real-time bet tickets coming in and this big liquidity is super important for neural networks and to train AI and to sharpen your prices, this is very difficult to replicate.

Coming to your second question to prediction markets, we still haven't seen any impact on our business from prediction markets. Of course, we fully understand that in unregulated markets in the U.S. specifically, these guys have some first-mover advantage and they will take some market share there, which is some threat for, I think, the regulated industry of betting. But in the regulated states, their impact so far was not material at all as the product is very simple.

We see it positive and negative. We see this very simple product prediction markets offer also as an opportunity to educate sport fans and to bring them to sports betting. So we don't only see this as a negative. But of course, the future will show how it turns out.

We will take our next question. Your question comes from Nicolas Kalanoski from ABG Sundal Collier.

Just a few questions from my end. So you've had a quite decent momentum in terms of signings, I think it's fair to say. I'm a little curious, has the feedback from prospective clients changed compared to, let's say, a year ago, if you look at the roster of prospects alone?

Yes, the market, of course, is in an evolving phase at the moment. I think we are still in a gold rush in South America, I would call it. So a lot of opportunities, a lot of regulation going there on country by country. We also still see big movements in the U.S. And of course, we have a lot of expectations, as Martin mentioned in his question before, specifically about prediction markets that this could even speed up the regulation in some U.S. states.

In Europe, market is already very, very mature. So there is not a lot of business additionally we can gain. We can take some business away from other suppliers, but there's not a lot of growth in Europe anymore.

On top of our turnkey business, of course, our new Odds Feed product is something which we're very focused on. And there, of course, the opinion about what Kambi is, I think, has changed in the market now. So we have a lot of, I would say, advanced discussions with big Tier 1 operators being very interested in this product. So this is a very exciting opportunity for us.

Yes. Very cool. I appreciate that. And I also appreciate your prior commentary on the impact of AI and how you view the business as being insulated partly against it.

Just a final one on the cost base. When I look at the guidance bridge, I take the building blocks of the guidance to mean you're relatively satisfied with your current cost base. Is there any chance that we can see changes in the OpEx base maybe turning into a tailwind for the profitability?

I wouldn't say we're satisfied. And I think I mentioned, I called out extensive savings programs. There are inflationary effects in the business for sure, and you see that in pay rises and supplier costs rising. So we need to battle against those. And I talked around the EUR 9 million annual cash savings programs. It's across all parts of the business.

We're looking at office sizes, renegotiating suppliers, how we structure ourselves, leveraging AI across trading, across the whole business. So we're doing -- we're working really hard on the cost base. And it's hard against that inflationary backdrop, but we are -- yes, we're trying to keep it as flat as possible.

There are no further phone questions. If you wish to take the written webcast questions...

Thank you. So we had quite a few written questions. So we'll start with the Odds Feed one. You just signed ComeOn on Odds Feed+ and stated you are getting good traction with Tier 1s despite established incumbents. Can you just expand on the difference between the Kambi Odds Feed and those supplied by others as well as future prospects?

Yes. Happy to take this question. So we're clearly a challenger in the Odds Feed market. We have been known for many years as being a full turnkey supplier. So I think the industry received the message now that there is something interesting also on the Odds Feed side, they can buy from Kambi now, and we see some good tractions with first Tier 1 customers having signed up.

The big difference and the edge we have on Odds Feed+ is clearly that most of the other Odds Feed, you can buy, they do pricing only on in-event data. So only on what's happening in the game. Our Odds Feed is traded, which means we fully leverage the 1.6 billion bet tickets we get into our system, and we trade the odds, meaning our odds are changing faster, more accurate, leading to a much better product for sports fans out there.

We don't suspend markets that long than others. Our bet acceptance rate is higher. Our availability is higher. Our margin is higher. The experience for sports fans is so much better taking our sportsbook, and the margin is so much better for operators taking a much sharper pricing.

Thank you. Next one, coming back a bit to the prediction markets. With the rapid rise of CFTC regulated prediction markets in the U.S., could there be an opportunity to license your Tzeract AI pricing technology, especially to financial market makers or trading firms operating in these markets?

If you ask the question, if we could, then the answer is yes. If we will do that, the answer is at least for the short-term, no, because we are licensed in many jurisdictions in the U.S. So we play on the white side of the business, and that's also something we will do in the future.

There is a high risk, and we received a lot of very clear statements from regulators across the U.S. that if we would go into this space that the risk of losing some license and therefore, also customers relying fully on us would be very high. So we could be market maker.

I don't think that Tzeract specifically would be the only edge we have here, but it's not on our agenda for the next few months. We will continuously monitor the space and especially the court cases and the decisions coming up here in the next few years. But for now, our strategy is clear: To stay fully focused on sports betting.

Yes. And the question was a bit also on financial markets outside of sports betting, but I guess the answer there is no as well. We're not really looking at that.

No. We're laser-focused on our strategy to offer the best available premium sportsbook. And there are always opportunities you could go left and right. But for us, it's super important to stay fully focused on our strategy.

Clear. Coming to Colombia. Colombia saw strong customer GGR growth in 2025, with VAT currently removed. How is Colombia reflected in your 2026 growth assumptions?

Yes. So I mean, there is a tailwind. If there's no tax introduced, there's around EUR 3.6 million tailwind versus last year. Of course, there may be a tax introduced, so that's why we say, we're aiming for the top end of the range given today, if there's no tax, but we're conscious that can change. We hope it's at a sensible level going forward. That's what we can really ask for at this stage.

How much on the assumptions is incorporated in sort of organic growth or...?

Yes, I can answer this question. So of course, the introduction of this new tax at the end of the first quarter last year disrupted a little bit the market because on these high tax, it's simply not possible to run a profitable business.

So our customers in this market try to offset the impact with a lot of more bonus money they gave to customers to keep their market share. Now the market changed only, I think, 3 weeks ago when this new tax was suspended. We see already now that customers in Colombia are changing their marketing strategy, their bonus and engagement strategy.

I think it's too early to say how this will change also market growth for our customers. But of course, we expect some very nice tailwind from this market. Difficult to say how big the organic growth because of these changed marketing strategies will be.

Then coming back to the 2026 launches. Does the contribution include any unsigned customers or only contracts already secured?

Both. It covers both. But I think that hopefully, the reassuring part, as I mentioned earlier, is that the Ontario Lottery and Gaming piece, which is obviously signed and launched is a massive part of that chart -- over half of that chart is from that one contract alone. And then we have some other signings recently announced, which are also in there. And then there is some expectation and hope of further signings contributing there.

Yes. Okay. And coming back to the Odds Feed, what share of 2026 revenue do you expect to come from modular products? I guess it's Abios and Shape as well, but also the Odds Feed.

Yes. I mean it's growing. I'd say, it's probably hopefully, it should be north of 10% this year in the 10% to 15% range, I think.

Yes. Okay. Following the Pickwin agreement, are you still equally positive on Latin America?

Yes, of course, we are. Many customers in the Brazilian market, of course, have signed up with suppliers when the market opened early 2025. So the next window of opportunity for us is coming right now where some of these contracts will come to an end eventually -- 2, 3 years contract. So we already have some inbound questions from operators in Brazil being not super happy with their existing suppliers, not only because of pricing and trading, but also mainly because of being not fully compliant with regulations.

This is actually one of our big, big strengths: Being licensed in more than 60 jurisdictions around the globe that customers can be 100% sure that they are fully compliant and there is no risk to lose a license. So also for the next, I would say, 18, 24 months, Latin America will be a key focus for our sales ambitions, yes.

Then moving to another area of growth. Could you provide an update on the Nevada licensing process for OMEGA and when we might expect customer launches there?

Yes. So we are fully licensed in Nevada. Next step is to go with our first customer in Nevada through what's called there the field test. We are in advanced discussion with several interested partners in the State of Nevada as we speak. And we are still very confident that we will be able to launch 1, 2 or 3 of them during the time of the year and go with one or more of them in this field test approach, which is already a production test then. So we would be already live then.

Thank you. Operators are optimistic that Alberta could go live at the end of Q2. Is this reflected in guidance either from existing operators or potential contract wins?

Alberta, I don't know specifically.

Yes. So of course, we have modeled into our 2026 budget movements up and down. Alberta will come most probably now soon as a new state, but there are also a lot of other, I would say, downsides and taxes we don't know to be announced and introduced today. So we don't expect Alberta to have a very material impact on our budget for '26. Of course, we appreciate each and any new state in the U.S. to regulate sports betting and to make it legal and to close down the black markets.

Okay. And then continuing on the taxes. The U.K. tax increase is for 2027. It feels a bit early to bring it up as a headwind for 2026. Are you that close to clients that they've already told you about the marketing budget for 2027? So maybe explain a little bit what is the...

Here, we're talking about -- I referenced earlier the remote gaming duty, and that's more on casino products, for example. Sports betting increase does come in '27, but there is a 2026 -- April '26 that remote gaming duty goes up from 21% to 40% and will severely impact U.K. operators.

There's been a huge talk in the U.K. around this. So it's very clear that that will, I'm sure, limit what they can spend on marketing and their resources generally. So that's the indirect impact that we will -- that we have included this year on us, which is what we see.

Yes. And then the 3% to 5% revenue growth, is that organic revenue growth, excluding FX? I guess, FX will be a negative given USD weakness.

Yes. There will be a small headwind on a full year basis. But yes, the 3% to 5% is excluding that.

How have rising taxes across your key markets affected your full year 2025 EBITDA?

Negatively. Always taxes -- I hate just talking about taxes. I much prefer talking about bonus opportunities. But yes, there's a long list of taxes that have hurt us in '25. You've seen it. It's something we expect. We do, of course, forecast for all these budget taxes going up, but I mean, it does hurt us. I'm not going to call out individual impacts, a long list of them.

Okay. And actually, the last question is on cash flow. Development cost of intangible assets decreased from EUR 28.2 million to EUR 26.3 million in 2025. What should we expect here for 2026?

Relatively flat, I would say. I mean, I've talked around some of the areas we are looking to rationalize our costs. But I think generally, it won't be in that area. So I wouldn't really especially see a massive change in the amount we're capitalizing going forward. Things can change. But as we stand here today, that's -- it seems a relatively stable number, I think, in our P&L and balance sheet.

Okay. Thank you. Thank you, everyone, for listening in today, and we look forward to speaking to you soon or again after the Q1 presentation.

That concludes the presentation for today. Thank you, David and Werner as well. Thank you.

Thank you, Mattias.

Good morning, everyone, and welcome to Kambi's Q3 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

So the agenda for today, we will start with some highlights from our CEO, Werner Becher, followed by a financial summary from our CFO, David Kenyon. Then Werner will come back with some operational highlights and the summary of the quarter. Following the presentation, we will have time for the Q&A.

With that, I would like to hand over the conference to you, Werner. Please go ahead.

Thanks, Mattias, and good morning, everyone. Today's report sets out some of the important steps we have been taking, putting in place key building blocks to enable long-term sustainable growth. On the commercial side, we have been incredibly busy. Momentum is really picking up.

Since the start of the third quarter, we have signed 12 new commercial agreements, which I will recap shortly. Three of those agreements were on our Odds Feed+ product, perhaps headlined by the recent partnership with Tier 1 operator, Superbet Group. This morning, we announced the acquisition of the source code of a player account management platform. We believe the addition of a proprietary PAM alongside our market-leading sportsbook product will open doors to new opportunities.

Our immediate focus is on markets with limited viable third-party options on the PAM side, with Nevada on top of our list. And finally, our underlying performance met expectations in Q3, reflecting strong margins and a continued focus on cost discipline. However, macroeconomic pressures have heightened, while our planned launch with Ontario Lottery is now likely to take place in early Q1 2026. These factors have led us to adjust our full year EBITDA guidance for 2025, to around EUR 17 million.

I now hand over to you, David, to give you more details on the financials, please.

Thank you, Werner, and good morning, everyone. Firstly, a summary of Q3. So revenue was EUR 37.4 million this quarter. Excluding nonrecurring transition fees that we received last year, this represented a decrease of 8.1%. And on the same basis, year-to-date revenue is down 1.2%. However, our ongoing efficiency program enabled us to significantly reduce our costs in the quarter. And this led to an adjusted EBITA (acq), earnings before interest, tax and amortization on acquisitions of EUR 3.4 million for the quarter. Excluding foreign exchange on revaluations, this metric was EUR 3.1 million for the quarter and EUR 10.3 million year-to-date.

Our underlying cash flow was positive. And after carrying out EUR 8.1 million of buybacks in the quarter, we end the period with a cash balance of EUR 45.4 million. This slide sets out the operator trading analysis, an index of the aggregated performance by our operators on our turnkey sportsbook. You'll see this quarter, we're presenting it in a new way to really highlight the seasonality of the sporting calendar that we see every year. This is driven in particular by the timing of the American football, the soccer, and the basketball sporting seasons. And Q1 and Q4 always have the highest turnover of the 4 quarters each year and we should expect the same pattern this year with a spike up in Q4.

Compared to Q3 last year, turnover was down 6%. Whilst we did see organic growth from certain customers and some new launches, this was offset by a number of factors, including the tournaments we had last year, Euros and Copa America, in soccer and also the Olympics. We had the FX impact for a weaker Colombian peso and U.S. dollar versus last year. Kindred carried out more migrations during the year, originally the dot-com markets in Q4 last year, and now the U.K. migrated at the start of September. And as mentioned in previous quarters, we have an ongoing impact from deposit limits in the Dutch market, which is also affecting our turnover.

The operator trading margin for the quarter was 10.3%. This was a really strong margin in July and August, and then dipped quite significantly in September, when there were very player-friendly results, I would say, in both the Champions League and the NFL. This slide sets out the evolution of our adjusted EBITA (acq) from Q3 last year to this year. Firstly, we saw material organic growth from a number of our operators, especially in the U.S. and Latin America.

In terms of new customers versus Q3 last year, this came in particular from our operators in Brazil, as well as those using the Odds Feed+ service. Then the negative, the downward pressures on that EBITA (acq) came as mentioned, from the tournaments last year, Euros, Copa America and Olympics, with this year a much smaller contribution from the Football Club World Cup. This, of course, is a temporary headwind.

Another temporary nonrecurring tough comparative is the transition fees, which we received last year from Penn, and Napoleon. This reduced to EUR 2.3 million this quarter. It will reduce again in Q4, before disappearing at the end of the year. In terms of migrations, Kindred exited the dot-com markets in Q4 last year, and as mentioned, U.K. at the start of September this year. There's also smaller amounts from migrations from Mr. Green, and Green Tube in these numbers.

In the Gaming Tax & Other column, we see a number of factors. Firstly, the impact of those deposit limits in the Netherlands. Also, as referenced previous earlier in the year, the new VAT on deposits in Colombia has had a material impact on our numbers. There's also been other gaming tax increases in the Netherlands and various U.S. states. And finally, we also see the impact of changing effective commission rates with certain customers in this column.

Pushing the EBITA (acq) upwards is the cost savings column there. The costs are roughly EUR 4 million lower than the same quarter last year. This is largely driven by a reduction in our staff costs with around 50 FTEs lower versus last year and relocations of roles to lower-cost locations. There was also some staff bonus costs taken last year, which we've not accrued this year. The second piece here is a positive EUR 1.2 million swing in the FX on revaluations. We had a EUR 900 million negative last year and a EUR 300 million positive this quarter. This is a nonrecurring benefit to our cost base this quarter.

I want to point out one other thing on our low staff cost this quarter, in particular. In Sweden and Denmark, we accrue the cost of vacation paid during the year, and we released the accrual when the staff take holiday in the summer months. This is a seasonal pattern seen every year, and this showed a GBP 1.1 million benefit in our OpEx versus Q2. This slide sets out our cash flow in the quarter. We had an opening cash balance of EUR 53.1 million.

We did see an increase in certain trade receivables balances, which we expect to be paid for in Q4. And we spent EUR 8.1 million on share repurchases in the quarter, taking our closing cash balance to EUR 45.4 million. Werner will tell you more about the acquisition of the PAM Source code we made today. Whilst we cannot disclose the purchase price, I can say that it will not impact our capital return strategy to return excess capital to shareholders through buybacks. And I would expect our upcoming buyback program to continue at a similar pace to our current program.

Werner referenced the change in guidance. Our original guidance was an adjusted EBITA (acq), excluding FX revaluations of EUR 20 million to EUR 25 million. Three main factors result in that changing today. Firstly, the regulated Brazilian market in general has developed more slowly than expected. There have been stringent regulatory requirements, including on AML, and this has led to certain friction converting players from the pre-regulated market. Secondly, there have been FX headwinds, especially the weakening of the U.S. dollar and the Colombian peso versus when we set the guidance. To date, this has had a EUR 1.8 million negative impact on our numbers. And if the FX stays roughly where it is, that number is likely to become around EUR 2.6 million by the end of the year. And lastly, Ontario Lottery and Gaming. We had originally hoped for a Q3 launch with this operator. This moved to a December launch due to the significant level of development work and testing needed prior to launch. This now looks very likely to move to January 2026 as this testing is finalized. On the flip side, we've managed to stay close to our original guidance with the tight cost control and the efficiency program I've referenced earlier. But as of today, we expect our adjusted EBITA (acq) for 2025 to be around EUR 17 million.

With that, I'll pass you back to Werner.

Thanks, David. I mentioned that we signed 12 new partner agreements since 1st of July. The majority of those have been in relation with our flagship product, our turnkey product. The one Q3 agreement not announced prior to the previous earnings presentation was Oneida Indian Nation, a tribal gaming operator, which runs 3 casinos in the state of New York. Having signed in August, the operators' casinos were all up and running on the Kambi Sportsbook, replacing the operator's previous supplier, OpenBet.

The agreement further strengthens our relationship with tribal gaming operators in the U.S. There has been a flurry of commercial activity since the end of the quarter. Glitnor Group, one of the leading operators in Sweden, will soon be launching on the Kambi Sportsbook platform in various jurisdictions, having also decided to move away from its incumbent supplier. Meanwhile, in the Netherlands, we signed 3 operators in BetNation, Holland Gaming Technology, and Hommerson. Despite recent changes to the tax and regulatory framework in the Netherlands, this market remains a key market for Kambi, and these partnerships -- these new partnerships will enable us to further strengthen our position there.

Finally, in terms of renewals for turnkey product, Kambi signed an extension to its retail turnkey sportsbook partnership with Penn Entertainment, which had been due to expire at the end of this year. The partnership, which currently sees Kambi supporting Penn in 30 properties across 13 states in the U.S. will now continue through July 27. These signings demonstrate the wide appeal for our turnkey sportsbook product, strengthening our partner network and diversifying our revenue base. When we took the decision to launch Odds Feed+, we did so because we recognized we could provide a quality of feed that no other supplier could match. This would enable us to, first, attract some of the largest operators in the world to our feed; and second, enable us to retain some of the revenue from partners who may leave our network. The past few months has seen us do just that.

Our partnership with Superbet will give them access to a complete sports library and their intention is to launch in the coming weeks and gradually expand into multiple sports. Superbet is globally #11 on EGR's annual Power 50 rankings, and market leader in a number of CEE countries with a prominent position also in Brazil. Superbet also operates the Napoleon brand in Belgium, which we're looking forward to work with once again.

In Q3, we also signed an Odds Feed agreement with LeoVegas, which see us retain some of their business as they continue to migrate to their own platform. And finally, Coolbet will also take our e-soccer and e-basketball odds through our OddsFeed+ API. In general, we continue to see great interest in our Odds Feed+ product with it being the only available premium feed on the market, offering both the precision and the flexibility operators demand.

We now come to today's news. Our acquisition of source code from Omega Systems, which will enable us to offer our own proprietary player account management platform, short PAM. First of all, what is a PAM? A PAM is a platform that carries out most of the end user account functions, such as registration, payments, KYC, AML, bonusing, and it also includes a casino platform. It's the core platform that integrates all gaming verticals, such as sports betting, poker, casino, bingo, virtual sports, et cetera. The key reason for obtaining a PAM is to pursue opportunities where there are no viable PAM options available for us, starting in Nevada. We believe with our own PAM in Nevada, along with our first-class sportsbook, we can capitalize on commercial opportunities in the state. It's important to note that we'll only be offering our PAM in tandem with our sports book, and we will continue to be platform agnostic, working alongside our trusted PAM partners. To unlock the Nevada opportunity for Kambi, our next step is to obtain PAM licensing in the state, which will position us to be ready to go to the market end of H1 2026.

So in summary, Q3 and the early stages of Q4 have been one of progress for Kambi in a number of areas. We've delivered 12 new agreements since the start of July with new turnkey and Odds Feed+ partners, along with partner extensions, demonstrating our strong commercial momentum. We've continued to show disciplined cost control with our ongoing efficiency program, delivering material cost reductions, which will continue into 2026. And finally, we are leveraging our unique assets to strengthen our market-leading position. These assets include our partner network of more than 50 operators and a global betting liquidity of EUR 17 billion being managed on our platform, fueling our AI-powered trading risk and management capabilities. As mentioned at the start of the presentation, we are building the foundations for long-term success and long-term growth, and I'm very confident we will deliver. Thank you.

Thank you, Werner. With that, I hand over the word to the operator, and see if we have any questions on the teleconference.

First question on the phone lines. The questions come from the line of Nicolas Kalanoski from ABG Sundal Collier.

Just a couple of questions from me. So just firstly, a little bit curious on the PAM renewal. I appreciate that you may not wish to disclose client-specific details, but could you perhaps elaborate a bit on the reasons behind the renewal, please?

PAM is in a silent period having the earnings call tomorrow. So we respect that. And unfortunately, we can't share more information about this deal today.

Yes. I respect that. Secondly, I think on the cost structure, it was a bit slimmer than expected in the -- I believe you mentioned there was some accrual of cost of vacation in Sweden and Denmark. But would you say that this cost base that we're seeing in this quarter is maintainable even going forward, of course, notwithstanding quarterly and seasonal effects, please?

I'd say, yes, but I would just flag that I mentioned that EUR 1.1 million positive cost reduction due to vacation pay, which is purely a Q3 benefit. But for the rest, yes, absolutely, it's sustainable. And as we've mentioned, it's an ongoing efficiency program. So we'll keep looking to do more, of course.

Just thirdly, just on Brazil. Are you seeing any change in the cadence in that market in Q4 so far? Or would you say that it's proceeding in line with Q3 generally?

So I see the market continuously growing. Eventually, the overall market size was a little bit overestimated before the regulation started. There's a little bit of disappointment, I would say, in the entire industry about the Brazilian market. We are not so sure if the market size actually was oversized and predicted to be a little bit bigger than it actually is now. From our perspective, it's more like that the black market is still very big and the channelization in Brazil hasn't worked as expected. So the legalized regulated market grew slower than expected because the black market is still very big there.

Just a follow-up, I think, on the unregulated piece or the black market. Are you seeing any legislative impact that could indicate that black market is becoming perhaps a bit smaller? Is there anything that indicates the channelization could come up, anything of that kind that you're seeing?

Yes, and no. We see efforts from the government and regulatory authorities in Brazil to limit the black market. On the other hand, the ongoing discussions in the Brazilian parliament to further increase taxes definitely will not help to get a high generalization rate in Brazil.

[Operator Instructions] The questions come from the line of Martin Arnell from DNB Carnegie.

My first question is on the guidance cut on the 2025. You mentioned three factors, like -- FX, Brazil, and the revised timing for all launch. Which one of these would you say matters the most here?

I say matters -- I mean, size-wise, they're all relatively similar in size from when we set the guidance. I'd say FX matters least because it's not structural. OLG is really a shift to January. So the vast majority of the revenue of that deal is completely unaffected. It's just we're talking about a few weeks push, which has impacted what we see in 2025 calendar year. And Brazil, unfortunately, probably is the most important because it's the one where we're not seeing the growth that we hoped for. So that's how I'd rank them.

On this OLG timing, is there anything that has happened or any issues behind the delay?

No, definitely not. This is a very complex big project for OLG and us together. They're operating 10,000 point of sales in Ontario. So the integration to their lottery system is a complicated project, which we have completed a few weeks ago. So I'd like to make sure that Kambi has delivered everything which was requested already to OLG.

We're in a testing and integration phase with them now and being market leader in Ontario. Of course, they want to make sure that everything is working perfectly before they launch the new product. This is why we did not have a lot of influence on the launch. They need some Ontario lottery, of course, to decide, but we expect the launch now early 2026.

Perfect. Then I have a question on the client pipeline. I appreciate you have signed a couple of ones in Q3. What about the outlook for continued additions of customers?

So the pipeline is not empty now, if this is what you want to hear, no. So we are getting good opportunities into our pipeline, and we are in different stages of negotiations with customers for Odds Feed+ for turnkey, for esports for front-end development deals, et cetera. So yes, we signed a lot of deals in the last few weeks, but you should expect us to continue on this pace.

My final question would be -- when we look at your top line performance and you comment on the headwinds and the tailwinds, and when you look into 2026, from what you know as of now -- can you confirm that the tailwinds are enough for you to grow your top line next year?

I think we're hopeful. We're not putting out a forecast as of today, but I think we set out plenty of tailwinds and specified which of the headwinds we think will stop. There are still some big headwinds with the migrations that we mustn't ignore, but I think the tailwinds are strong. So we'll probably wait to Q4 to set out what we think really for next year, but we're confident.

Yes. We'll provide a new guidance for 2026 financials together with our Q4 earnings report.

We have no further questions on the phone line currently. So I'll hand back to you for the webcast questions.

Thank you. So I'll start reading the questions to you, and you can decide who wants to answer. Ahead of '26, are there reasons to review the communication and what has been delivered during the year given the positive statements regarding both customer signings and the guidance?

To review the communication?

Yes.

Not sure how to answer this question, to be honest, Mattias. I think we were all a little bit disappointed, sorry, that the closing and signing of some deals took a little bit longer than expected. Yes, I would have loved to see us signing some of these deals already earlier. I think we catch up a lot now in Q3, and we'll continue to sign these going forward. That's also a learning we have with our Odds Feed+ product, targeting the first phase of our go-to-market strategy, now mainly the biggest operators out there that these big companies can be sometimes a little bit bureaucratic internally, meaning in reality that closing deals, having so many stakeholders to be part of decision-making process can take a little bit longer than at least we expected. But other than that, I think the progress we have shown now, at least in the last few months, let us feel very confident.

Next question. Previously, there was a lot of talk about the Bet Builder as a module product. But since spring, there has been close to complete silence. Why has it progressed more slowly than expected?

Yes. Our Odds product, starting with an Odds Feed+ product, Bet Relay, Bet Acceptance Recommendations, et cetera, is a product which we will continue to invest a lot. We have a lot of customers using our Bet Builder products. There has been no great interest on the market, to be honest, to buy Bet Builder products in general. Most of the operators already have a product. We're very focused with this product at the moment on our turnkey customers because integration of this product together with and feeds makes a lot of sense. A separate integration only of a Bet Builder product without also supplying the odds in practice doesn't work great for the operators.

Yes. And continuing on that topic, will you launch a managed trading service MTS? And if so, when will that be ready to sell? And would it be more suitable to smaller operators below the sort of Tier 1 and Tier 0s?

So yes, first of all, we are a premium supplier. So the smallest operators on this planet will most probably never be our focus. But we're not looking so much on to MTS versus Odds Feed. What we want to supply and deliver to our customers is a very flexible product suite. They can either have a simple OddsFeed broadcast. They can provide us the battery lay and we manage better for them their liabilities. We can even do more than what's available today with many MTS products. We could give them clear bet acceptance recommendations about temporary dynamically adjusted life delays, stakes they should accept, et cetera, et cetera.

So there is a bunch of modules which we have packaged, of course, which we could offer to our customers, starting with a very basic Odds Feed, up to a full turnkey. So our goal is not to have 2 or 3 boxes to sell to customers and to force to buy these boxes. Our approach is more flexible, reacting to what operators really need.

So a question for you, David, to shift things up a bit. What are the primary drivers behind the strong client acquisition during Q3? And do you anticipate the trend holding into Q4 and Q1? I think maybe we answered that already.

Yes, I think...

At the end of the year approaches, how do you view the developments that have been taking place? Are you satisfied? What could you have done better?

That's a tough question to answer in 30 seconds because, of course, we are in the budget process for 2026 and also in our strategy process for 2026, where a review of where we have been successful this year, not so much successful definitely is a big part of what we are doing now. So clearly, our focus going forward is to even accelerate and scale more in our AI trading and risk management capabilities. So rolling out more sports on this platform.

We will also invest a lot more in our front end going forward, native apps as well as mobile and web front-end apps because we learned that to have an outstanding product on the front end is even more important in Latin America than in a lot of other markets. And Latin America is a big battleground and a big opportunity for us at the moment.

On the sales side, as some of the questions also indicate, we've done a lot of changes. We have executed and are still in this process, what we call a commercial uplift project to organize ourselves in a different way, et cetera, et cetera. So there are a lot of ongoing strategic initiatives, of course, happening already now.

Then maybe finally, one for David. How confident are you on making the EUR 7.6 million EBITA (acq) in the Q4, given OLG is delayed? Can you explain the confidence there? Can you give some guidance on likely contribution from OLG in 2026?

Well, firstly, Q4, I mean, really, it's a seasonal story. It's -- we're now seeing all the leagues in full flow. So of course, we're looking -- hoping for a strong margin. We saw some player-friendly results in those key leagues in the NFL and Champions League in September. So we need the margin. But all in all, the seasonality should really help us drive strong turnover. I talked about the spike in Q4. That's really what we're expecting, and we've seen it every year for as long as I've been working in this industry. So we really expect that. So that's the main reason to believe in Q4.

In terms of OLG, they have an existing business. It depends when we can launch, but we set out some numbers that they're doing currently in the past. Yes, they have a strong business, and we're really looking forward to taking it over and growing it for them.

What is your take on all the noise about Polymarket? Is it a threat? Or could it be an opportunity? Could Kambi, for example, become a market maker or sell data or anything else to Polymarket?

Yes. So I think we are in a similar position to all the betting and casino operators in the U.S. being licensed in 60-plus jurisdictions globally and more than 20 jurisdictions in the U.S., we have a lot to lose. So we have to be very careful, and we will never risk our existing licenses. We will continue to support our partners in the licensed and legalized betting space in the U.S. But clearly, definitely, this is something we are looking to very closely. We don't see any big impact or not that impact at all, to be honest, on the existing licensed markets from the prediction markets. It looks like it's really more business for the still unregulated markets like California and Texas. And these prediction market guys definitely have a first-mover advantage there, right?

Coming back to your question about market making. Yes, with our EUR 17 billion liquidity and the precision of our odds, I think we could be a great partner for the prediction markets to help them with some market making, but we'll only do it if we feel it's legal and it's safe for us.

Thanks. Next question. Given the somewhat slow growth of the number of new customers for the modules during '25, what should we now expect for '26?

Yes. So I think we said earlier this year, the goal is to sign 3 to 5 customers in OddsFeed this year because we only focused on the big Tier 0s and Tier 1s, which we delivered and which we will continue to deliver also in the next few weeks, hopefully, being in discussions with some more. For next year, after this first phase of our go-to-market strategy, as discussed already with our commercial uplift project, we will increase our efforts on the sales team and increase the sales teams for OddsFeed+ product as well to target then also Tier 2 operators as a next step. So definitely, having now signed some big names in the industry, and seeing them taking more and more sports from us, of course, is a good story also for us now to convince more operators to take this great product. Yes.

So following up on that, given you started only with the largest operators, you did the same thing when you launched the turnkey. Are you repeating the same mistake? Or is this sort of different this time different?

I'm not sure if being market leader, it was a mistake to start this way, to be honest. Could we do more? Yes, 100%. But I think to go to market without having a proven business case, without having proven product to market fit is a waste of money and time. That's why we designed this go-to-market strategy in the way it is. Again, we are now accelerating. We are now scaling up the teams. We also need to learn from our operators based on integration, what tools they need, what reporting they need, right? So we learned our lessons now in the last few months, and we are now able to -- we'll be able to scale and accelerate, yes.

Okay. Moving over to the PAM and Nevada. Is it reasonable and rational to acquire PAM for Nevada before signing any customers? How far along are you in the customer discussions at this stage?

Yes, it's a chicken and egg problem, isn't it? So you can either wait to have signed a customer and then you're too late to get it licensed, so we'll never catch this opportunity or you invest. Our approach is to invest. And I think, as David said very clearly, the investment is a commercially attractive one for us, which means it will not impact our share buyback strategy at all. We are in conversations already with very interesting opportunities in Nevada, where we need this PAM to get the deals closed and to not only promise them, but really deliver within a few months the product so that we can go to market.

Following up on that, would you like to give some more color on why you are, relatively speaking, investing so heavily in Nevada?

So Nevada is a very specific state. We talked about that it's the gold standard for licensing on this planet. This means in reality, there is little to no competition for us there, right? And the existing sportsbooks operated in the casinos in Las Vegas, right, are sometimes not very competitive. So it's a big interesting market with little to no competition, which makes it now being licensed to us very attractive for us to take market share and to, let's say, bring these opportunities home.

Looking at other national lottery opportunities, are there still potential in that space for new clients heading into 2026?

Yes. I think participating in public tenders of state-owned or private lotteries, mainly state-owned still around the globe is part of our usual business. We have been engaged in several ones this year. We got noticed that a few more ones are coming probably next year. This is part of normal business. With Ontario lottery, with some Svenska Spel, with the Belgium lottery, I think we have a very interesting footprint and also a very good showcase how more successful also state-owned lotteries can be with a premium product. So this is an interesting market for us definitely.

Yes. And then moving over to the Netherlands. What would you say is the main reason behind signing customers in the Netherlands in such a short time? Is it possible to repeat in other markets?

Yes. That's a very interesting question because everyone is talking so much about how more difficult Europe gets with all these taxes always increasing, increasing, making the life of the operators out there more difficult every day. But this lower margin they now see because of the increased taxes, deposits limit, et cetera, also triggers internally with many of the operators, is our existing sportsbook good enough to compete? And is it efficient enough from a cost base to either continue to run it in-house or to work with other third parties. And it looks like that especially in these markets where life is getting more difficult for operators, more and more consider to outsource. But if they want to stay in the market, they also understand that they need a product where you can compete against the big guys.

Coming back to the PAM, is it something hindering you from bundling the PAM with the rest of your products worldwide? Please elaborate as to why it is currently not viewed to be a long-term replacement for the current PAM partners.

No, nothing is hindering us. So the agreement, which makes it also commercially attractive, to be very honest to you, has a clear, I would say, restriction. So we can only sell this PAM together with our sportsbook, which is no problem for us because we have no ambitions at all to sell the PAM as a stand-alone business outside of our sportsbook anyway going forward. But this is the only restriction we have. So we only start now in Nevada because, let me call it low-hanging fruit, right, and a very urgent business opportunity for us to go in and take some market share and get some more revenues from Nevada. But definitely, this is something we will consider going forward after this now first focus phase also to use it in other jurisdictions around the globe. But I want to remind what I said before, we definitely will stay agnostic when it comes to PAMs. So whenever a customer prefers to work with one of our other trusted PAM partners, we will never bundle and force customers to use our PAM because this is not our DNA.

Coming over to you, David, on the cost side. The cost base is expected to be EUR 145 million in 2025. Is it fair to assume that the cost base will be lower than this in '26, given the ongoing cost savings?

It's always a tricky on this because we've obviously have inflationary pressures on most of our P&L base on the cost base. So whatever savings we make to a large are going to be offsetting those inflationary kind of headwinds we have. So a little bit hard to say as I stand here right today, but rest assured, we are continuing -- we're never ending on this efficiency drive now. And plus we'll get in 2026, we'll get some positive effect of savings we've made mid-2025. So that OddsFeed for full year in 2026. So yes, we're certainly going to -- don't worry, we're not going to stop being efficient. That's all I can say now.

Thanks. And then coming back to the pipeline and sales. So commercial momentum seems to be picking up. Can you talk about your confidence returning to organic revenue growth? And when should this expect to happen? If you're successful, should Kambi grow around 5% organically midterm? Or what is the target?

Yes. I think -- please let me repeat what David said, right? So we have no approved budget and guidance today already for 2026. So this needs some more alignment, of course, also with the Board before we can provide some more guidance about 2026. Definitely, next year, as outlined by David, some of our headwinds will decline. We signed a lot of new deals this year. Our pipeline is looking good. So to say next year, we will be back on top line growth and costs will go down. It's difficult for me to say today, not having an approved budget from the Board already now.

Short question on Kindred. What is the end date for the partnership? Has that been set?

I think we announced previously, we had a deal that ends at the end of 2026, with that EUR 55 million guarantee spread over 3 years -- '24, '25, '26. So yes, that's it, yes.

We have an OddsFeed+ in parallel going longer than that.

Yes. For you, David, we've seen good progress on cost saving on OpEx. How should we view reductions in CapEx going forward?

I mean I think there have been -- we've made some cuts in engineering, especially on the consulting side, as part of our whole efficiency program. But in general, I'd say the -- right now, the cuts, we're not focusing on cuts on the side that drives CapEx. So engineering, there's more other areas of the business that we're looking at because the engineering is driving the product that we need to sell to deliver 12 deals in this quarter. So I won't give a long-term focus on it. But right now, it's not what's driving our bigger cuts.

We are not desperate enough to stop investing.

Yes.

Last question. What is the scale of opportunity in Nevada in terms of contribution on the revenue side?

That's a tough question. But -- we are in talks with several customers out there. Some of them have EUR 100 million plus GGR. So we are definitely not talking only about a very few small opportunities, but some quite interesting opportunities. And as mentioned, the product available today in this market, I would say, is quite limited. So we have definitely an edge with our product there. We have to go through the field test still in Nevada. That's on the agenda for the next few months. But it's definitely not only a small market for us going forward, why we put so much focus on it now.

Thanks. That was all the questions. So thank you very much, everyone, for participating today. Thank you, David and Werner. And we look forward to seeing you in February when we come back with our Q4 report.