Group hits quarterly revenue record

21 March 2024
(PRESS RELEASE) -- Group Limited, a leading provider of digital marketing services for the global online gambling industry, today reported record financial results for the fourth quarter and full year ended December 31, 2023. The Company also announced a definitive agreement to acquire and related assets in a transaction that is expected to be immediately accretive to the Company’s financial results upon closing. In addition, the Company introduced 2024 revenue and Adjusted EBITDA guidance.
Charles Gillespie, Chief Executive Officer and Co-Founder of Group, commented, “Our fourth quarter results extended our strong record of delivering high top-line growth and attractive margins. With consistent execution over the years, and especially over the past four years in North America, we have established one of the strongest and highest-growth performance marketing businesses in the online gambling industry. Our operating momentum continued throughout 2023 and the undeniable power of our capital efficient business is on full display in our full year results which include a 42% increase in revenue to $108.7 million, a 53% rise in Adjusted EBITDA to $36.7 million and 71% growth in Free Cash Flow to $16.2 million.
“Our fourth quarter and full year North American revenue increased 103% and 69%, respectively. Growth was driven by new state launches, strong increases in ‘same-state’ sales and our blossoming media partnership initiatives. We are confident in our ability to continue growing our North American market share this year and we will also benefit from the recent launch of online sports betting in our home state of North Carolina, where we are off to a strong start since the market launched on March 11th.
“ Group is positioned for continued revenue, Adjusted EBITDA and Free Cash Flow growth in 2024 and beyond across all of our markets. As significant shareholders, the founders and senior management of Group remain fully aligned with all owners and we are steadfastly committed to enhancing shareholder value.”
Enters into Definitive Agreement to Acquire and Related Assets Group also announced today that it will expand its presence across the United Kingdom and other European markets through a definitive agreement to acquire and related assets. Closing is expected at the beginning of April, subject to customary closing conditions. Group anticipates that these assets will produce revenue of approximately $10.0 million and incremental Adjusted EBITDA of approximately $5.0 million during the nine months from April to December 2024.
The Company will acquire these assets for a total consideration of between $37.5 million and $42.5 million, consisting of $20.0 million paid on closing, $10.0 million paid on the six-month anniversary of closing and between $7.5 million and $12.5 million to be paid on the one-year anniversary of the closing subject to the revenue performance of the assets during the remainder of 2024. Group expects to fund the purchase price from existing cash on hand, borrowings under the recently announced credit facility and future cash flow.
“This acquisition will provide us with another big brand and assets that complement our existing website portfolio in a number of our key-focus markets, enabling us to drive further growth which is both high margin and highly accretive,” said Charles Gillespie. “By operating these assets on our technology platform, we expect to unlock their full potential. We are confident that this latest acquisition will create incremental shareholder value in the same way we have done with previous acquisitions.”
Fourth Quarter 2023 and Recent Business Highlights
- Grew North American revenue 103% to $20.3 million
- Delivered more than 159,000 new depositing customers ("NDCs")
- Strong contribution from Kentucky following launch in late September
- Acquired European casino domains and related assets for $6.4 million
- Repurchased 205,727 shares for an average price of $9.70
- Won the iGB Casino Affiliate of the Year Award
- Launched operations in our home state of North Carolina on March 11th
- Secured new $50 million credit facility with Wells Fargo Bank, National Association
- Entered into a definitive agreement to acquire and related assets
Elias Mark, Chief Financial Officer of Group, added, “The strong value we create for our online gambling operator partners is evident in the 56% increase in the number of NDCs we sent to them in 2023. Consistent with our capital efficient DNA, nearly all of our revenue growth in 2023 was organic(1) which we again converted into Free Cash Flow at a very high percentage. We are positioned to further our operating momentum in 2024 as the mid-points of our revenue and Adjusted EBITDA outlook reflect growth of 21% and 25%, respectively.”