Gambling.com Group reduces workforce by 25% as it pivots to AI

Adjusted EBITDA fell to $9.0 million from $15.9 million a year earlier, with margin compressing to 22% from 39%, reflecting increased costs linked to traffic diversification and AI investment. Net loss stood at $1.2 million compared with net income of $11.2 million in the prior-year period, while adjusted net income declined 77% to $3.8 million. Operating cash flow also fell to $0.9 million from $8.1 million.

The affiliate’s incoming CEO, Kevin McCrystle, said performance was “in line with expectations” despite external challenges, including “poor organic search dynamics and more recent regulatory headwinds”.

AI-driven restructuring

During the quarter, Gambling.com Group’s revenue from sports data services continued to rise, growing 13% to $11.2 million, driven by enterprise demand.

McCrystle highlighted that the company has continued integrating AI into workflows and is “moving quickly to adopt AI as the foundational layer of how the entire organisation operates”.

As part of the initiative, the business plans to cut around 25% of its workforce while generating annualised cost savings of $13 million. The restructuring follows rising technology costs, including higher AI-related subscription expenses, which contributed to a 12% increase in operating costs during the quarter.

CFO Elias Mark added that the transformation is aimed at driving efficiency and cash flow. “We expect to realise about half of the $13 million in annualised savings in the second half of 2026, which will help drive margin expansion in this period and beyond,” he said. “As our business continues to evolve, we remain well-positioned to continue delivering substantial free cash flow that allows us to both de-lever and further invest in new products.”

Performance marketing under pressure

The affiliate’s marketing revenue declined 5% to $29.2 million amid search headwinds and regulatory pressures, as previously reported in Q4 2025. Performance marketing remains the largest contributor at $25.5 million, representing 63% of total revenue, though broadly flat year-on-year.

Geographically, North America drove growth, with revenue rising 26% to $26.5 million and accounting for 66% of group revenue. In contrast, the UK and Ireland declined 30% to $7.8 million, while other European markets fell 27%.

The company cited UK gaming duty increases and new Finnish regulations as key factors affecting player value and marketing efficiency, though these impacts were partly offset by growth from sources not dependent on organic search referrals. Management also highlighted that ongoing investment in diversifying traffic sources in the marketing business contributed to a 171% increase in cost of sales to $6.1 million.

2026 outlook

Gambling.com Group lowered its full-year outlook, guiding for revenue of $165 million to $170 million and adjusted EBITDA of $45 million to $50 million.

The company expects growth to be driven primarily by sports data services, with enterprise subscriptions continuing to expand. However, marketing headwinds are expected to persist, particularly in regulated European markets.

Management anticipates a stronger second half, supported by cost savings from restructuring, ongoing AI integration and an improved revenue mix. In addition, the rollout of a new product is expected to contribute only marginally in 2026 but form part of longer-term growth plans.