Kambi Group Earnings Call: AI, Margins And Risks

Kambi Group plc Class B ((SE:KAMBI)) has held its Q4 earnings call. Read on for the main highlights of the call.

Kambi Group’s latest earnings call struck a cautiously optimistic tone, pairing clear operational gains with frank acknowledgement of ongoing headwinds. Management highlighted margin expansion, accelerating AI adoption, new contracts such as the major OLG deal, and upgraded 2026 profit guidance, while also stressing tax, FX and partner migration risks that will weigh on the near term.

Q4 Profitability Improvement

Adjusted EBITA for Q4 rose 16%, climbing from EUR 6.3m to EUR 7.4m as profitability improved despite top-line pressure. Quarterly cash flow reached EUR 6.0m, underlining stronger cash generation and suggesting that recent cost controls are feeding through to the bottom line.

Full-Year Financial Position and Cash

For the full year, revenue came in at EUR 162.0m with cash flow of EUR 21.2m and no debt on the balance sheet. Year-end cash stood at EUR 32.9m in the bank and has since risen above EUR 40m, allowing Kambi to fund EUR 25.8m of share buybacks from excess liquidity.

Operator Trading Margin Expansion

Operator trading margin improved to 11.2% in Q4 and 10.8% for the year, up from 10.0% the previous year, reflecting better pricing and product performance. On the back of this, Kambi raised its forward operator trading margin guidance to around 11%, signaling confidence that the higher level is sustainable.

Upgraded 2026 Profit Guidance

Management set 2026 adjusted EBITA guidance at EUR 20m–EUR 25m, up from EUR 17.6m delivered in 2025. They indicated the outcome should trend toward the upper end of the range if a new sports betting tax is not introduced in Colombia, which would otherwise reduce profitability.

AI Adoption and Product Quality

AI is becoming central to Kambi’s trading engine, with 49% of bets fully AI-traded in 2025 and the company surpassing the 50% level in January. Management said AI-driven pricing delivers sharper odds, higher bet acceptance and faster trading, all of which support margin expansion and scalability.

New Business Wins and Major OLG Launch

Kambi added 15 partners since the start of Q4 and reported several recent turnkey launches, most notably Ontario Lottery & Gaming. The OLG deal spans online and roughly 10,000 retail locations under contract through 2032 and is expected to account for over half of the ‘2026 launches’ revenue column.

Odds Feed+ and Modular Revenue Growth

Odds Feed+ continued to gain traction with Tier-1 operators such as ComeOn and FDJ UNITED, underscoring demand for modular solutions. Management expects Odds Feed and other modular products to contribute more than 10% of 2026 revenue, guiding toward roughly 10–15% of the total.

Operational Efficiency Initiatives

Cost reduction programs lowered the expense base in 2025, and Kambi is targeting around EUR 9m of annual cash savings from ongoing efficiency efforts in 2026. These savings are intended to offset wage and supplier inflation, cushioning margins as the company invests in growth and technology.

World Cup 2026 Revenue Opportunity

Management expects the 2026 World Cup to generate roughly EUR 5m of incremental revenue, equating to about a 3% lift to the top line. The tournament is planned to be fully AI-traded across Kambi’s network, which should amplify both engagement and monetization during the event.

Full-Year Revenue Decline and EBITDA Pressure

Reported full-year revenue fell to EUR 162.0m from EUR 176.4m, with the prior period boosted by EUR 12.5m of transition fees. Excluding those fees, revenue slipped around 1.2% and adjusted EBITA dropped to EUR 17.6m, down EUR 7.8m year on year, highlighting current earnings pressure.

Transition Fee and Migration Impacts

The revenue comparison is also clouded by major partner migrations, especially Kindred and LeoVegas, which are shifting away from turnkey. The Kindred turnkey contract will be fully out by year-end, creating a headwind that extends into 2027 before easing as the partner transitions to Odds Feed+.

Tax and Regulatory Headwinds

Kambi faces a series of tax and regulatory challenges, including uncertainty around a potential Colombia deposit tax and higher burdens in markets like the Netherlands, Brazil and Illinois. A sizeable increase in UK remote gaming duty from 2026 may also force operators to trim marketing budgets, indirectly weighing on turnover.

Foreign Exchange Headwind

Foreign exchange movements, primarily weakness in the U.S. dollar, acted as a drag on reported turnover and are factored as a negative in the guidance bridge. These FX pressures complicate visibility on reported growth even as underlying operational metrics improve.

Rising Cost of Sales and Inflationary Pressures

Cost of sales is expected to rise due to higher data supplier charges and other input costs, while operating expenses should stay broadly flat in nominal terms. To achieve this, Kambi must offset salary and supplier inflation through efficiency savings and absorb some one-off items that distort year-on-year comparisons.

Dependency Reduction Yet Concentration Risk

The share of revenue from Kambi’s top three partners fell to 36%, indicating better diversification across the customer base. However, the business still relies on a relatively small number of large operators, making contract renewals and migrations a continued source of volatility.

Colombia Tax Uncertainty and Other New Taxes

Guidance is particularly sensitive to whether a new Colombia sports betting tax is introduced or not, with management flagging a material earnings swing. They quantified a tailwind of roughly EUR 3.6m to adjusted EBITA if no such tax arises, underscoring how fiscal changes can move outcomes.

Competitive and Market Risks from Prediction Markets

Kambi also pointed to the rise of CFTC-regulated prediction markets in the U.S. as a potential long-term competitive threat, especially in currently unregulated niches. While they see no meaningful impact yet in regulated markets, management is monitoring the space as it evolves.

Forward-Looking Guidance and Outlook

Looking ahead to 2026, Kambi guides to adjusted EBITA of EUR 20m–EUR 25m, mid–single-digit organic growth excluding FX and an operator trading margin around 11%. The outlook factors in roughly EUR 5m World Cup revenue, expanding modular/Odds Feed contributions above 10% of sales and about EUR 9m of annual cash savings amid rising costs.

Kambi’s earnings call painted a picture of a business in transition, using AI, new contracts and efficiency drives to offset tax, FX and migration pressures. For investors, the raised 2026 profit guidance, solid cash position and growing modular revenue are positives, but execution on partner shifts and navigating regulatory risks will be crucial to realizing the upside.