GAMB Q1 2025: Recurring Revenue Surges to 50%, Reinforcing Subscription-Led Margin Expansion
Gambling.com Group’s first quarter showcased a decisive shift toward recurring revenue, with subscriptions and revenue share now making up half of total revenue, underpinned by the OddsJam and OpticOdds acquisitions. Margin expansion and robust organic iGaming growth highlight the company’s operational leverage, while management’s focus on B2B data products and global market share signals a multi-year trajectory toward its $100 million EBITDA target. With resilient digital demand and a disciplined M&A stance, GAMB is positioned to weather macro volatility and capitalize on emerging regulatory opportunities.
Summary
- Subscription Revenue Mix Climbs: Recurring revenue now comprises half of total revenue, accelerating margin visibility.
- B2B Data Services Outperform: OddsJam and OpticOdds integration is fueling faster-than-expected enterprise growth.
- Margin Expansion Persists: Operating leverage and disciplined cost control support the $100 million EBITDA ambition.
Performance Analysis
Gambling.com Group’s Q1 2025 results revealed a business model in transition, with recurring revenue (subscriptions and revenue share) now accounting for 50% of total revenue, up sharply following the OddsJam and OpticOdds acquisitions. The marketing segment, still the largest contributor, grew 13% as iGaming-led strategies and the FreeBets.com asset drove UK and European share gains. Meanwhile, the sports data services business quadrupled its revenue, with B2B enterprise subscriptions gaining momentum—OpticOdds now stands out as the group’s fastest-growing asset.
Gross profit margin expanded by 200 basis points to 94.5%, reflecting the scalability of the digital model and a favorable mix shift toward high-margin subscription and data products. Operating expenses rose 50%, largely due to amortization from recent acquisitions, but excluding these non-cash charges, expense growth trailed revenue growth. Adjusted EBITDA margin reached 39%, up 400 basis points year-over-year, despite elevated partnership fees and stepped-up product investment. Free cash flow grew 25%, funding both M&A and a strategic debt swap that lowered borrowing costs by 200 basis points. Liquidity remains robust, with $21.5 million in cash and substantial undrawn credit capacity.
- Subscription Momentum: Subscription revenue now 24% of total, with recurring revenue (including revenue share) at 50%.
- iGaming Outperformance: iGaming revenues rose 24%, outpacing OSB and supporting geographic diversification.
- Margin Leverage: Adjusted EBITDA margin expanded to 39%, driven by operational scale and mix shift toward higher-margin products.
Management’s reiteration of full-year guidance underscores confidence in sustained growth across all regions, with upside from new market launches and further product rollouts.
Executive Commentary
"The integration of these new sports data services is progressing as planned. The consumer-facing part of the business, OddsJam, has a strong subscriber base that we are confident we can scale while maintaining margins and profitability. For the B2B side of the business, OpticOdds, we are just getting started with leveraging our reach and resources to grow enterprise subscription revenues."
Charles, Chief Executive Officer
"Gross profit margin increased roughly 200 basis points compared to the first quarter of last year to 94.5%. Excluding the non-cash acquisition-related amortization, growth in operating expenses was well under our revenue growth of 48% for Q1. Adjusted EBITDA increased 56% year-over-year to another all-time record of 15.9 million."
Elias, Chief Financial Officer
Strategic Positioning
1. Recurring Revenue Engine
GAMB’s pivot to a recurring revenue model is now bearing fruit, with subscriptions (B2B and B2C) and revenue share deals comprising 50% of total revenue. This shift enhances revenue predictability, margin resilience, and valuation appeal, especially as enterprise data products scale. This structural evolution is central to the company’s $100 million EBITDA ambition.
2. Data Services as Growth Catalyst
The acquisition and integration of OddsJam and OpticOdds have transformed GAMB’s product mix, with B2B enterprise subscriptions (OpticOdds) now the fastest-growing segment. Management is investing in dedicated sales capacity and product innovation, aiming to leverage the group’s global reach to accelerate enterprise adoption and cross-sell opportunities.
3. iGaming-Led Market Share Expansion
GAMB’s iGaming-first strategy is driving robust organic growth, particularly in the UK and Europe, while North America has lapped its toughest comps. The group’s leading brands—Gambling.com, Bookies.com, and Casinos.com—continue to gain share, supported by AI-powered content and differentiated digital marketing. The nascent Casinos.com brand is being positioned for global relevance as U.S. iGaming legalization progresses.
4. Capital Flexibility and M&A Discipline
Strong free cash flow and a flexible balance sheet enable ongoing M&A and product investments. Management remains highly selective on acquisitions, emphasizing fit and margin accretion. The recent debt swap to euro borrowings lowers interest costs and aligns currency exposure, further supporting capital efficiency.
5. Regulatory and Product Optionality
GAMB is positioned to capitalize on emerging regulatory tailwinds, including potential U.S. iGaming expansion and the rapid evolution of prediction markets. The company’s technology stack and content engine allow for nimble entry into new product categories with minimal incremental cost.
Key Considerations
This quarter marks a pivotal maturation of GAMB’s business model, with recurring revenue and B2B data services now central to both growth and margin trajectory. The company’s operational leverage, disciplined M&A, and proactive response to digital channel shifts create multiple levers for sustainable value creation.
Key Considerations:
- Subscription Mix Impact: Higher recurring revenue boosts margin visibility, but requires ongoing investment in product differentiation and client retention.
- AI and Search Dynamics: Generative AI is emerging as a new high-intent traffic source, potentially reducing reliance on Google and reshaping digital marketing economics.
- U.S. Regulatory Optionality: Pending iGaming and prediction market reforms present significant upside, but timing and state-level policy remain variable.
- Geographic Diversification: Broadening exposure across Europe, North America, and select global markets mitigates regional volatility, though Brazil remains a cautious watchpoint.
- Cost Structure Management: Operating expense growth is being contained below revenue growth (excluding acquisition amortization), supporting ongoing margin expansion.
Risks
Key risks include regulatory delays or adverse tax changes in major markets, especially in the U.S., which could impact partner economics and affiliate demand. Execution risk exists in scaling B2B data services and integrating acquisitions, while digital channel disruption from AI-driven search could alter traffic patterns. Currency volatility, though less impactful after recent hedging, still presents some translation risk.
Forward Outlook
For Q2 2025, GAMB expects:
- Sequentially lower margins due to seasonality and ongoing product investment, with margin re-expansion in the second half as new offerings scale.
- Continued revenue growth across all geographies, with Missouri and other new markets added to guidance once launch dates are confirmed.
For full-year 2025, management reiterated guidance:
- Revenue midpoint of $172 million (35% YoY growth)
- Adjusted EBITDA midpoint of $68 million (40% YoY growth)
Management cites robust recurring revenue, global market share gains, and an expanding B2B pipeline as key drivers underpinning guidance. Guidance excludes contributions from unannounced acquisitions or new market launches, maintaining a conservative base case.
- Watch for incremental upside from new market entries and product launches.
- Product investments (e.g., Rotowire revamp) could drive outperformance in H2.
Takeaways
GAMB’s Q1 2025 results signal a structural pivot toward a higher-quality, recurring revenue model, with B2B data and subscriptions now a core growth driver. Operational leverage is translating into margin gains, while disciplined capital allocation and selective M&A keep the company on track toward its $100 million EBITDA goal.
- Recurring Revenue Inflection: The move to 50% recurring revenue marks a step-change in business quality, with implications for valuation and cash flow stability.
- Enterprise Data Acceleration: OpticOdds and OddsJam are scaling faster than legacy marketing, positioning GAMB as a data infrastructure provider to the online betting ecosystem.
- Regulatory and Channel Optionality: Flexibility to capture upside from U.S. iGaming, prediction markets, and AI-driven search channels will define the next leg of growth.
Conclusion
GAMB’s Q1 performance underscores the strategic payoff of its recurring revenue and data-centric pivot, while operational discipline and global diversification enable resilience amid macro and regulatory uncertainty. The company’s multi-pronged growth engine and capital flexibility support a credible path to $100 million in adjusted EBITDA.
Industry Read-Through
GAMB’s results highlight a broader industry shift toward subscription and enterprise data models, signaling that affiliate marketing and digital publishers must diversify beyond traffic arbitrage to build sustainable, high-margin businesses. The rapid adoption of AI-driven search and high-intent traffic sources is likely to reshape digital marketing ROI for online gambling and other consumer-facing verticals. Operators and service providers with recurring revenue models and robust technology stacks will be best positioned to withstand regulatory flux and capitalize on emerging market opportunities, including prediction markets and new iGaming jurisdictions. Investors should monitor how peers adapt their business models to match GAMB’s margin and revenue quality improvements.