Kindred continues to grow as the operator records another revenue spike in Q2
Author:
Muhammad Gregory
Renowned global iGaming operator Kindred has recently published the revenue report for the second quarter of 2023. A decent performance in multiple regulated gambling jurisdictions by the gambling brands of Kindred has led to a 29 percent year-on-year (YoY) increase in the operator’s Q2 revenue. Along with the positive quarterly report, Kindred also published results of its performance in the first half of 2023. The operator reported a 26 percent revenue increase in H1.
Kindred’s Q2 revenue records a 29 percent increase. ?Carlos Muza/Unsplash
After reporting positive results in the first quarter of 2023, Kindred has continued to show strong growth in the year’s second quarter. The Malta-based operator owns nine iGaming brands, via which it operates in Australia, North America, and several regulated European jurisdictions. A customer base of 30 million further validates the credibility and magnitude of the operator and its brands. Kindred is also an active member of the European Gaming and Betting Association (EGBA), which is a trading association comprising the leading iGaming and betting operators of the world and promotes sustainable gambling in regulated markets, ensuring the highest standards of player safety measures. The Maltese operator is also a founding member of the International Betting Integrity Association. Despite operating at such a high level and performing well in the first half of the year, the journey of Kindred through the second quarter of 2023 has been a topsy-turvy one. The sudden departures of top officials partially overshadowed a few extremely positive developments.
Apart from offering a wide array of online games, one of Kindred’s primary objectives is to promote responsible gambling. The operator started its own initiative called Journey Towards Zero five years ago. This initiative highlights Kindred’s ambition to reach a level where it generates zero revenue from harmful gambling. Initially, the Journey Towards Zero was supposed to be a five-year plan, and the operator expected the harmful gambling revenue to drop to zero by the end of 2023.
Responsible gambling measures implemented by the Maltese operator have helped curb the harmful gambling revenue. However, it is still well away from zero, and the company will certainly require more time and may also require some additional measures to reach its goal. Since 2021, along with quarterly revenue reports, Kindred has also published the revenue percentage from harmful gambling separately. In the most recent report, the share of gross winnings revenue from high-risk players has dropped to 3.1 percent. In the previous quarter, the same figure was at 3.3 percent.
In the second quarter of the year, Kindred’s total revenue recorded a 29 percent YoY spike as it touched ￡307.3 million. In the corresponding period last year, the revenue was ￡238.7 million. A key highlight from the B2C segment came in the gross winnings revenue as it increased from ￡233.5 million to ￡298.3 million, registering a 28 percent increase. The underlying EBITDA increased by a whopping 120 percent, taking the sum from ￡25.3 million to ￡55.7 million. As a result, there was a massive increase in profit before and after tax. In the second quarter of last year, the profit before tax was ￡7 million; after taxation, it fell to ￡5.8 million. This year, in the same period, the pre-taxation profit soared to ￡33.1 million. After taxes, the figure came down to ￡27.7 million. The per-share earnings were ￡0.13, and a total of 1,547,000 shares were purchased for a total value of just over ￡14 million. The free cash flow came out of the negative side of the scale and touched the ￡3 million-mark. The number of active users spiked 17 percent from 1,336,706 in Q2 2022 to 1,561,444 in Q2 2023.
Interim CEO of Kindred Nils Anden was pleased with the operator’s performance in the second quarter and conveyed his thoughts on the report.
“The strong start to the second quarter has remained throughout most of the period, with the first two months being particularly strong. June was slightly slower due to normal seasonality creating a lack of sports events, including Wimbledon only taking place during the third quarter this year. Continued focus on a strong customer offering has resulted in revenue increasing 29 percent to GBP 307.3 million compared to the same period last year. As revenue increases, we see the true scalability of our business model. Together with the actions taken at the start of the year to optimise our cost base proving to be effective, underlying EBITDA reached GBP 55.7 million, representing a margin of 18 percent, or 20 percent excluding North America. We reiterate our underlying EBITDA guidance for the full year 2023 of at least GBP 200 million.”
Two Kindred Brands fined in the UK
While the latest quarterly report bears numbers indicating a significant increase in cash inflow, a few instances cost Kindred a hefty chunk of money. In the second quarter of 2023, Kindred-owned operators 32Red and Platinum Gaming were slapped with hefty fines in the regulated jurisdiction of the United Kingdom. The country’s gambling regulator, the United Kingdom Gambling Commission (UKGC), conducted an investigation in which both operators were not complying with the nation’s anti-money laundering (AML) and social responsibility laws.
As a result, the UKGC imposed a fine worth almost ￡4.2 million on 32Red. The other guilty operator, Platinum Gaming, was slapped with a fine that was almost worth ￡3 million. Additionally, the UKGC issued a stern warning to both the Kindred-owned operators. 32 Red operates via its online casino website in the UK, while Platinum Gaming runs the Unibet website. The violation has been studied, and both operators are expected to steer clear of the breach as a repetition of the same could see them face an even bigger fine.
The departure of officials and a new milestone in the US
After a decent performance last year and making significant progress in the Mission Towards Zero initiative, Kindred started the new year without Maris Catania, the former Head of Responsible Gaming and Research at Kindred. Catania spent almost 14 years with Kindred and made significant contributions to the Mission Towards Zero and the Player Safety – Early Detection System (PS-EDS). Player Safety Gaming manager Esther Scheepers replaced her.
In May this year, Johan Wilsby vacated the Chief Financial Officer’s seat only a few days before Kindred CEO Henrik Tjarnstrom stepped down. Kindred’s Board of Directors elected Nils Anden to be the interim CEO of the company. Anden left Kindred in 2016 but returned to the company four years later. He was the company’s Chief Commercial Officer and will remain as the interim CEO until further notice.
The rapid and sudden change of personnel came just months before Kindred unveiled its proprietary tech platform in the United States. The Unibet Casino and Sportsbook apps were made accessible to people residing in the regulated gambling jurisdictions of New Jersey and Pennsylvania. The proprietary tech platform aims to improve user experience with personalized content, better analytics, and a wide range of products on a user-friendly interface.
