1. EXECUTIVE SUMMARY & THESIS

Kambi’s Q2, published July 22, was the strongest print of the Becher era: revenue up 13.5% to EUR 45.9m, adjusted EBITA (acq) doubling to EUR 7.6m at a 16.5% margin, full-year guidance raised to EUR 23-27m, and the stock up roughly 10% on the day. The tough-marker read matters here more than usual: management’s own bridge attributes roughly EUR 4m of year-on-year profit uplift to major-tournament effects, net of last year’s Club World Cup — which is essentially the entire EBITA doubling. Strip the roughly EUR 6m of World Cup revenue and underlying Q2 revenue was approximately flat against the prior year, as new launches offset migration runoff.

That is not a criticism of the quarter — it is the thesis. Kambi is executing a deliberate client-mix transition: the tier-1 operators that departed to in-house builds (Kindred/FDJ UNITED, LeoVegas) are being replaced by lottery-channel turnkey clients with structurally lower in-house propensity and longer contract duration, while departures themselves are converted into modular Odds Feed+ revenue, FDJ UNITED being the template. With operating expenses flat to declining and a proprietary AI trading system heading toward 90%-plus of turnover, the operating leverage on any positive ex-tournament inflection is substantial. We rate Kambi ACCUMULATE, sized for small-cap liquidity, with the position thesis falsifiable in the Q3 and Q4 migration bridges.

2. BUSINESS MODEL & COMPETITIVE POSITION

Kambi supplies the full managed sportsbook stack — odds compiling, trading, risk management, platform and front-end via Shape Games — to B2C operators, earning a share of operator GGR with no direct consumer exposure. The strategic pivot of the last two years is modularity: Odds Feed+ unbundles the trading asset so operators who insource the platform can still buy Kambi’s odds, converting existential churn into a product line. The AI trading transition (over half of bets already, with NFL onboarding from September and a stated path beyond 90% of turnover) is both a cost and a quality play: a larger data network compounding into sharper pricing is the closest thing B2B supply has to a network-effect moat.

The honest structural weakness is buyer power. Kambi’s two largest client relationships in its history both left for in-house builds, and the client-facing risk showed up operationally in April, when issues required credits to operators — a reminder that in managed trading, execution failures convert directly into revenue. The counter is the new client mix: lotteries such as Ontario’s OLG (novated from FDJ), the Atlantic Lottery/British Columbia multi-province agreement, and France’s PMU are precisely the customer class least likely to build a trading floor.

3. INDUSTRY & REGULATORY BACKDROP

B2B sportsbook supply is bifurcating. Tier-1 operators increasingly own their stacks and shop modularly; the durable turnkey demand pool is lotteries and regional operators, where Kambi has now stacked wins across Canada and France. The 2026 World Cup produced a sector-wide operator-friendly margin windfall — Kambi’s turnkey network processed over EUR 1bn of tournament turnover at roughly 17% margins, with elevated margins persisting into early Q3. The unresolved sector variable is prediction markets: management fielded questions on the Q2 call, and while Kambi has no committed product, its trading and odds capability is exactly the asset the exchange ecosystem needs — the same market-making logic the sell side applies to the large operator pricing engines. Kambi’s more immediate exposure is indirect: its tier-2 B2C clients are the cohort most vulnerable to exchange share-shift. theScore Bet (PENN) remains our licensed-cohort trailing benchmark.

4. FINANCIAL REVIEW

The H1 shape is the cleanest evidence of the turnaround mechanics: revenue up 9.1% to EUR 89.4m while operating expenses fell 1.4%, doubling adjusted EBITA (acq) to EUR 13.3m at a 14.8% margin — against a 2025 trough in which full-year profitability guidance was cut to EUR 17m on Brazil, FX and Ontario delays. The quality caveats are tabled below with tiers: the tournament bridge (F) shows the windfall concentration; the cash position is sourced only to Q3-25 (P, dated); and the April credit quantum is undisclosed (G). Note also the metric shift from EBITDA-based guidance in 2025 to adjusted EBITA (acq) now — a cleaner economic measure given capitalized development, but one that complicates year-on-year bridging until the FY25 restated base is pulled.

5. FORECAST & KEY DRIVERS

The raised EUR 23-27m adjusted EBITA guide embeds World Cup margins that ran through the July final; Q4 will be the first clean look at the post-tournament run-rate. Three drivers decide the next four quarters: the ramp curve of OLG, ALC/BCLC and PMU against the FDJ UNITED and LeoVegas runoff schedule; whether Odds Feed+ begins to register visibly (it is not yet disclosed as a segment — itself a diligence item); and whether the AI trading transition beyond 90% of turnover delivers measurable margin structure into the NFL season. The falsification test is explicit: if the Q3 and Q4 bridges show the migrations column still overwhelming the launch column on an ex-tournament basis, the transition thesis is failing and the rating comes down.

6. VALUATION

On triangulated figures — a roughly EUR 355m pre-print market capitalization less about EUR 45m of dated cash — Kambi trades near EUR 310m enterprise value, or roughly 12x the midpoint of the newly raised EBITA guide (E-tier, order-of-magnitude; every input here needs a post-print refresh). Within our B2B comp spine that is broadly in line with Sportradar (8.5x) and Lottomatica (8.4x) on their EBITDA bases once metric differences are respected, for a business at an earnings trough with flat costs and identified growth vectors. The lone recent sell-side view — a Jefferies Hold at SEK 140 citing an absence of catalysts — predates the beat-and-raise and reads stale. We decline a price target per the situation anchor: the value case rests on the ex-tournament inflection, and the multiple will follow the bridges.

7. RISKS & SCENARIOS

The risk stack: continued migration runoff through 2027; the optical unwind risk when tournament margins normalize in Q4; concentrated buyer power demonstrated by two flagship departures; operational execution risk evidenced by the April credits; indirect prediction-market pressure on the tier-2 client pool; Brazil and Colombia regulatory cost drag; and First North small-cap illiquidity with thin coverage. We weight the migration-runoff timing highest — the thesis lives or dies on the bridge columns, not the headline guide.

SOURCE REGISTRY

DISCLOSURES

Prepared by Kelly Criterion Capital LLC for internal decision support and public open-source distribution. Not investment advice. Figures tagged F are filing/company-report-sourced; P press-sourced; E estimated/triangulated (order-of-magnitude only); G indicates a gap treated as a diligence item. Price, market cap and EV figures predate or triangulate around the July 22 print and require refresh. The research phase for this note was executed in-session with live web search standing in for the agent’s API research call; render and validation phases used the production pipeline.